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Orlando Real Estate -

2015 Forecast: Gains Ahead for home sales in Orlando, Fl & Nationwide

February 24th, 2015 11:53 AM by Karyn Smith

2015 Forecast: Gains Ahead for home sales in Orlando, Fl & Nationwide

Continued economic growth and more reasonable lending standards could unleash pent-up demand for home sales.
JANUARY 2015 | BY ROBERT FREEDMAN

Alone among big Western economies, the United States is poised for solid growth in 2015, fueling job creation and keeping home sales in Orlando, FL and nationwide on an upward path. The National Association of REALTORS® forecasts that existing-home sales will reach 5.3 million, an increase of almost half a million over 2014. The national median home price will rise, too, but at a sustainable 4 percent rate, to just below $216,000.

Increasingly confident renter households will enter the homebuying market after watching rental growth rates hit a seven-year high. And households that were forced into foreclosure or a short sale during the housing crisis several years ago could begin streaming back to the market, too.

Sales will be bolstered by the expected return of more reasonable mortgage underwriting standards that were in place prior to the housing boom. This shift by lenders will help soften the impact of gradually rising interest rates, which NAR expects to top out just below 5 percent this year. If interest rates defy expectations and remain close to where they are currently, this will be another boost to home sales in Orlando Florida & nationwide, says NAR Chief Economist Lawrence Yun.

On the commercial side, continued modest improvement in vacancies, absorption rates, and rent growth is projected for all the major sectors in 2015.

The big unknown for real estate is the health of the global economy. If the economies of Europe and other powerhouses continue to lag, further U.S. growth could be stymied, slowing the expansion of residential and commercial markets.

201420152016
Forecast
GDP growth2.2%2.7%2.9%
Existing-home sales (millions)4.905.305.40
New-home sales (units)440,000620,000700,000
Housing starts (units)1,000,0001,300,0001,400,000
Home price (median)$ 207,600$ 215,900$ 225,300
Fed funds rate0.1%0.4%1.6%
30-year mortgage4.2%4.9%6.0%
Commercial
Office
Vacancy rate16.2%15.7%15.6%
Net absorption (sq. ft.)35,58648,84155,026
Completions (sq. ft.)27,07342,15444,460
Rent growth2.6%3.3%3.6%
Industrial
Vacancy rate8.9%8.5%8.1%
Net absorption (sq. ft.)110,652102,463105,780
Completions (sq. ft.)81,00971,34962,097
Rent growth2.4%2.9%3.1%
Retail
Vacancy rate9.8%9.6%9.4%
Net absorption (sq. ft.)11,35018,87123,792
Completions (sq. ft.)7,74711,71115,924
Rent growth2.0%2.5%3.0%
Multifamily
Vacancy rate4.0%4.1%4.2%
Net absorption (units)216,296171,167143,626
Completions (units)180,796210,669165,339
Rent growth4.0%3.9%3.5%
All tables use data compiled by NAR Research.
Figures for 2007–2013 are actual; figures for 2014–2016 are projected.

 

Wealth Gap
Household Wealth: Owners vs. Renters
OwnersRentersDifference
1998$132,100$4,20031x
2001$172,600$4,80036x
2004$184,700$4,00046x
2007$234,800$5,10046x
2010$174,500$5,10034x
2013$195,400$5,40036x
Source: Federal Reserve Survey of Consumer Finances

Steady Gains
(existing-home sales)
20093,820,000
20104,190,000
20114,260,000
20124,660,000
20135,090,000
20144,937,000
20155,295,000
20165,380,000
Source: NAR

Profitability Expected
Expectations over the next 12 months (percentage of firms)
LessSameMore
Residential Firm82666
Commercial Firm62371
Source: NAR

Want to Buy
Gen Y attitudes on home ownership
Home ownership is an important long-term goal75%
Home ownership is an excellent investment73%
Among renters, belief owning a home makes more sense59%
Among renters, belief it’s difficult to get mortgage73%
Posted in:General
Posted by Karyn Smith on February 24th, 2015 11:53 AM

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