The housing recovery in 2013 was uneven, according to a report by real estate website Trulia
, but things may smooth out during 2014. Trulia’s Housing Barometer tracks five indicators – existing home sales, home price level, delinquency and foreclosure rate, new home starts and employment rate – three of which are now on track to a full recovery. Non-distressed home sales and prices are moving toward normal levels, and delinquency and foreclosure rates are improving, according to Trulia.
However, rising home prices are going to make it harder for many consumers to buy, even tipping the “rent vs. buy” math in favor of rental in a couple of markets, Trulia reported. The company projects that higher mortgage rates and home prices will make buying less attractive for first-time homebuyers and investors.
However, rising prices
might bring business from repeat buyers, because the higher price of a new home will be offset by the higher price they’re able to sell their old home for, according to Trulia.
“Repeat buyers (are) less discouraged by rising prices than either investors or first-time buyers because the home they already own has also risen in value,” wrote Trulia Chief Economist Jed Kolko in a news release. “Also, the down payment is less of a challenge for repeat buyers if they have equity in their current home.”
If the projections are right, it means it’s time for originators to make sure their referral channel is strong – and to make sure to maintain their relationships with real estate professionals, according to Michael Deery, president of Citywide Financial Corp. and one of the nation’s top originators.
“Something (originators) always should have been doing while rates were low is maintaining good relationships with agents,” Deery said. “Treat them well, treat their clients well – because then, no matter what the market’s like, you’ll have a steady stream of business.”
Repeat buyers will take center stage next year as steepening home prices cause investors and first-time home buyers to steer clear, according to research released Thursday.