Wednesday, January 07, 2015
From 2012 to 2014 the first stage of the housing recovery was driven by investors and other buyers looking to find undervalued homes or take advantage of foreclosures. In that time period, some of the housing markets that saw the steepest decline during the housing bubble saw the largest price rebounds. After a certain amount of time the prices get to a point in which they are no longer a value to investors or buyers looking to make cash over the long term. In 2015, we are likely to see the next stage of recovery according to the 2015 Trulia forecast. The next stage of recovery will depend on fundamentals which include job growth and rising incomes.
The top 10 markets to watch, according to Trulia, are as follows:
Seattle, Washington
Fresno, California
San Diego, California
Salt Lake City, Utah
Dallas, Texas
Middlesex County, Massachusetts
Boston, Massachusetts
New York, New York
Raleigh, North Carolina
It should come as no surprise that Raleigh, North Carolina is on the list. Job growth has been consistent in Wake, Durham, Orange and Chatham County over the last several years. Rising incomes are something we have seen and will likely continue to see in 2015. With education, technology and medicine being three of the largest industries in the area it stands to reason that professionals will see a jump in their yearly salaries moving forward.
Something important to note is that first time home buyers are still not back to where they were prior to the housing market top in 2006. New home sales, single family starts and new homeownership will take longer to recover, which could be in 2016 or 2017. College students that graduated in the last three years have found it difficult to find a job. In fact, the National Center for Education Statistics reports those with a bachelor’s degree or higher between the ages of 20 and 24 are becoming a larger percentage of those unemployed as shown in the chart below:
If new home sales and single family starts are going to increase it is going to take an decrease in the number of unemployed college graduates. This will be an interesting trend to watch over the course of the next several months and years.
Ultimately, job growth and rising incomes will trigger phase two of the housing recovery. If you are looking to purchase a house in Raleigh, Durham, Chapel Hill or Wake Forest please feel free to reach out to Real Estate Experts at 1-919-928-5131. We will be more than happy to discuss some of the options available in the spring of 2015.