Whether you currently have your Knoxville home on the market, are planning on selling in the future, are searching for a home in Knoxville, or plan to be, knowing what the real estate landscape will look like in the year ahead can help you make a plan. What can we expect moving forward for the rest of 2013 and through 2014 in the Knoxville real estate market? The video below, recorded yesterday, answers many of those questions. Lawrence Yun, Chief Economist with the National Association of REALTORS, gives us his professional opinion on how far we’ve come the last few years and what we have to look forward to in the real estate market in the year ahead.
A summary of the main points include:
- We’ve experienced a 20% cumulative gain in homes sold over the last 2 years
- We’ve experienced double digit price gains in the last 2 years
- We are seeing a decline in affordability (caused by the higher home prices, slower income increases and rising interest rates)
- Decline in affordability will level out the rapid growth of home sales
- Home prices will continue to rise because of a continued inventory shortages
- Job growth will increase the pool of home buyers
- Look for a possible loosening in the mortgage underwriting (approval) standards
- Mortgage interest rates should rise and average approximately 5.3% by the end of 2014
- Price increases will be more moderate
What does this mean for you as a Knoxville home seller or home buyer? If you are selling a home in Knoxville you will benefit from the continued price gains, but the rising interest rates could effect the number of buyers that can afford your home. Also, once you’ve sold your Knoxville home you typically turn into a buyer. Those buying a home in Knoxville will be effected by the decline in affordability caused by the higher home prices and rising interest rates. Continued shortages in inventory will mean longer home search periods and having to pay closer to asking price because of increased competition for Knoxville homes.
Our advice would be to start the process now. Take advantage of the current mortgage rates and home prices before they start rising. While many buyers will wait until Spring, starting now means you will face less competition which could ultimately save you even more money.