There are plenty of places where you can find predictions about the real estate market in 2014. I don’t have a crystal ball, so I don’t make predictions. But I will tell you that there are several facts that point to a trend of increasing relocation in 2014. Taken together, these factors may drive people make the decision to leave their current locale for one with a better cost of living, likely making 2014 the “Year of the Big Move.” Here’s why:
- The Federal Reserve announced last week plans to begin tapering the Quantitative Easing that has kept mortgage rates historically low during the recession and nascent recovery. Wall Street responded favorably, but for Main Street, this move means higher mortgage rates. For many would-be homebuyers, an increase of 1 percentage point could make monthly mortgage and interest payments in their current area beyond their reach.
- Pay is not keeping pace with home price increases. That means homes are getting more expensive faster than our wages can keep up. This combined with increasing mortgage rates is driving affordability down in many higher-priced markets.
- The recession took its toll on many people, whose personal wealth eroded considerably, and we are entering a rebuilding phase, in the economy, the housing market and for individuals. Rebuilding in their current area may not be an option.
- As home prices increase in many markets across the country, homeowners who were underwater are in a positive equity position and finally able to make a move. As they consider their options, many are looking across state lines to places with an overall lower cost of living, better job opportunities and even better weather.
- And finally, U.S. Census data is showing an increase in what they call “migration,” i.e. moving to a new state or region of the country. Historically, people in their 20s and 30s are most likely to undertake a big move, but in the last few years, it’s the 30-somethings that are doing it more frequently.
What does this mean for the industry?
This trend toward relocation represents a change from the type of business that real estate agents have been doing lately. Especially for agents newer to real estate, they may have never dealt with relocation clients before. That means 2014 is going to be a time for them to brush up on the skills they need to understand this new type of seller or buyer.
Listen here to learn more.
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