There’s a lot of changes due around the country in 2014… and the housing market isn’t exactly safe from those changes.
Phoenix, Arizona, like most major housing markets across the country, experienced some rather interesting changes over the bulk of 2013, notably amounting to spikes in housing prices throughout the year.
This year, according to real estate experts in the region, say that the Phoenix real estate market is likely to see ‘less drastic price spikes, higher interest rates and decreasing interest associated with Wall Street investors, with the commercial sector due for a longer recovery.’ To go more into detail about these assumptions, we’re going to take a look at the industry’s predictions for 2014, as relayed from news sources.
2014 predictions for Phoenix real estate
The housing market will recover at a much slower rate this year.
This is mainly attributed to the fact that the Phoenix metro market has actually been in recovery for the past two years. While there were relatively interesting market fluctuations over the past two years, experts in the area say that the recovery will last throughout the year, though at a ‘much slower and normal’ pace than previously seen.
This year’s ‘year-over-year’ price spikes are also expected to hover in the 6 to 8 percent range, drastically lower than those in 2013. Last year, those price fluctuations hovered in the 25 to 30 percent range.
Experts also mentioned that the mortgage sector will see some changes to its current interest rates, which are expected to be ‘much higher’ than the 3.5 percent rates of the past. As for the home building sector, the city of Phoenix expects to get as least ’14,700 new home permits,’ according to their conservative estimates. This comes after a rather disappointing results in terms of the new home market from last year, where Phoenix only issued out ‘less than 13,000′ new home permits.
Wall Street’s ‘home buying’ phase will end.
Phoenix, along with other choice locations throughout the United States, was one of the targets of Wall Street’s home buying and renting business aspirations. That was two years ago, and even around that time, their buying prowess peaked (July 2012) after they acquired a little over 800 single-family homes.
The nine firms associated with Wall Street now own over 13,000 homes across the Maricopa County, which amounts of about 5 percent of the single family inventory there. Since home prices in the Maricopa County area have increased over the past year, their home buying activity actually slowed down. According to experts, that’s expected to continue throughout 2014 as they look to other potential markets.
The construction industry will continue to struggle.
With the proliferation of retailers expanding their web connectivity and the lack of home builders, the construction industry in the country is expected to take another hit this year.
While industrial construction is doing relatively all right, experts pin that on the proliferation of ‘big users’ who need the work done. Since smaller users don’t or aren’t actively seeking help from the construction industry, the sector is still considered at least ‘two years away’ from recovery, particularly when that activity is expected to start picking up again.