Real Estate Recovery to Become More Broad-based as Homeowners Add Activity to Investors
Consumers are more committed to buying or selling this year, according to Prudential Real Estate's fourth quarter Consumer Outlook Survey.
Of the 2,500 consumers surveyed, 78 percent held a favorable view of
real estate, a five-point jump from the previous quarter and 15 points
higher than at the end of 2012. Sixty-three percent said they were more
committed to buying and selling in 2014.
One generation in particular has a favorable perception of real
estate right now: Millennials. The generation peaked at 87 percent with a
favorable perception of real estate in the latest survey.
“Consumers understand that the U.S. economy and residential real
estate continue moving in positive directions,” says Earl Lee, CEO of
HSF Affiliates LLC. “Accordingly, they’re feeling much better about
their personal situations and want to take advantage of attractive home
prices in many markets and interest rates that remain low by historical
standards.”
However, two events in 2013 — the government sequestration and rising
interest rates — have influenced their personal finance decisions,
consumers say.
And while they’re optimistic, consumers are also realistic, believing
that the rate of appreciation of U.S. home values will slow after a
strong run in 2013. They say their No. 1 concern about the housing
market is “decreasing home values,” followed by “saving enough for a
down payment.” Respondents to the survey also say that tight housing
inventories would likely impact their home-buying decisions this year,
and 67 percent expect to face more buyer competition.
“Normalcy is returning to residential real estate,” says Lee. “People
are seeking homes for all the right reasons: to gain shelter and
security, raise a family, and generate long-term wealth.”
—By REALTOR® Magazine