We want to wish you a happy, healthy, and prosperous New Year. We hope 2015 will be the year that you achieve significant landmarks in your life. May you reap the full benefit of the optimism and momentum that comes with the beginning of a new year to fuel your drive towards all your chosen goals.
The Yao Team is preparing for a great year ahead in the real estate market. We expect 2015 to be a year marked by a return to normalcy and balance. We’ve been watching the various market forces interact with one another throughout 2014. The housing supply and demand should balance each other out sometime in 2015 (see the Three-year History-Inventory chart below).
In a stable and balanced market without high appreciation potential, we expect investors will be a small segment of the market. Although, foreign buyers who worry about currency fluctuation or restrictions in their own countries still may want to invest in the more stable U.S. to preserve capital and they may still play a significant part in our market here. Otherwise, the majority of the market activity will be homeowner purchases. Generation Y buyers may start to overtake Generation X buyers as the largest group of homebuyers in 2015. Baby Boomers may start to downsize this year. We are already seeing a lot of first time homebuyers as well as lateral movers (selling a home and moving to another larger/smaller home).
Generally speaking, both buyers and sellers will be evenly leveraged. Sellers will be competing with others sellers on the price, quality, and desirability of their homes for sale. Buyers may not have more choices of homes per se (the inventory level may have reached a peak), but consistent influx of new listings gives the sense that “another home will come on the market soon”.
Speaking of homes coming on the market, now that we are in January, there is another interesting phenomenon on new listings I dubbed the “January Effect”. Take a look at the chart below. You can see there is a spike of new listings hitting the market in January from the low in December, year after year. We will be seeing this again this coming month.
Okay, I will stop here. As always, contact us if you have any real estate related questions. Each real estate situation is unique and we enjoy providing consultation with customized analysis and personalized plan. We look forward to chatting with you in 2015!