What’s the Buzz?
Happy New Year to all! 2014 was The Kennedy Group’s BEST YEAR EVER, and all indications are that 2015 will be even better! THANK YOU to all who helped us have such a successful year!
We are thrilled to partner with Supreme Auctions in offering a spectacular luxury home for sale next month! This incredible contemporary hillside estate will be offered to the public at a no-reserve auction on February 12, 2015. To participate in the auction, and for more information, contact The Kennedy Group at 602.320-0677 or visit www.Supreme-Auctions.com.
The Phoenix real estate market in 2013 was one in which there was a relative shortage of homes available for sale versus the demand, and was therefore an active seller’s market with sharply rising prices.
Market Summary & Predictions
By contrast, 2014 was a fairly balanced market—meaning the number of homes available for sale and the number of buyers were somewhat equal. More homes came on the market as homeowners became aware of the increase in their home’s value. Meanwhile, investors exited the market for the same reason. Values had risen to a point where it no longer made sense (from an investment standpoint) to purchase homes in our market. Understand, these are general comments—not “all encompassing”.
So as supply increased and demand decreased, we entered into a much more stable market. Prices also remained stable, with about a 5% to 6% annual increase.
The story for 2015 will revolve around two types of buyers: “Boomerang Buyers” and “Millennials”. Virtually all experts are predicting a banner year—most are saying that we will shift from a balanced market back to a seller’s market in early 2015 due to the influence of these two groups.
“Boomerang Buyers” are those who had been homeowners and lost their home to a short sale or foreclosure (in Maricopa County, one out of four homeowners were affected by this). The bulk of the families in this group will again be eligible to qualify for a loan in the early parts of 2015, and this will continue in waves for the next few years. Enough time has passed since the event of their short sale or foreclosure, which in turn will allow them to enjoy the benefits of homeownership again, thus calling them Boomerang Buyers.
“Millennials” are the new generation looking to get into their first home. Households headed by millennials will see significant growth as a reflection of economic gains. Millennials will also drive two-thirds of household formations over the next five years. Next year’s addition of 2.75 million jobs and increased household formation will be the two key factors driving first-time buyer sales.
The combination of these two buyer groups will cause demand to increase and may lead to prices rising and days-on-market decreasing as inventory is absorbed by these buyers re-entering the market.
On the negative side, mortgage rates will almost certainly increase in 2015, as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year. Most industry experts are forecasting 30-year fixed rate mortgages will reach 5% by the end of the year. While still at historic lows, rate increases will affect housing affordability for first-timers trying to break into the housing market, and will be another factor pushing them to less expensive locales.
In this edition:
- Custom Built $7+Million Contemporary Phoenix Estate Offered at No Reserve Auction
- Phoenix named hot housing market to watch in 2015
- Freddie Mac Predicts Biggest Year for Home Sales Since ’07
- Stronger Economic Fundamentals Expected to Drive Increases in Home Sales, Housing Starts in 2015
- Realtor.com® 2015 Housing Forecast: Stage Set for the Return of First-Time Home Buyers
- New York Times: Homeownership is Best Way To Build Wealth
- Mortgage Rates
Custom Built $7+Million Contemporary Phoenix Estate Offered at No Reserve Auction
While luxury homes abound throughout the greater Phoenixmetropolitan area, perhaps no other was built with as much precision and meticulous attention to detail as Presario Point, an 8,900-square-foot custom-built modern masterpiece nestled in the Ahwatukee Foothills. Click here for complete article.
Phoenix named hot housing market to watch in 2015
Metro Phoenix is one of the U.S.’s “10 hottest housing markets to watch in 2015,” according to a new Realtor.com report. Click here for complete article.
Freddie Mac Predicts Biggest Year for Home Sales Since ’07
Freddie Mac predicted that 2015 will see the highest level of home sales in the U.S. since 2007 in its December 2014 U.S. Economic and Housing Market Outlook released recently. Click here for complete article.
Stronger Economic Fundamentals Expected to Drive Increases in Home Sales, Housing Starts in 2015
Improvements in economic fundamentals, notably employment growth among millennials, will fuel significant increases in home sales and housing starts and a modest rise in home prices in 2015, according to CoreLogic’s 2015 Housing Outlook. Click here for complete article.
Realtor.com® 2015 Housing Forecast: Stage Set for the Return of First-Time Home Buyers
Following years of retrenchment among prospective first-time homebuyers and the dampening effect it has had on the recovery of the housing market, first-timers will return to the market next year, according to the realtor.com® 2015 Housing Forecast. Click here for complete article.
New York Times: Homeownership is Best Way To Build Wealth
Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth. Click here for complete article.
U.S. averages as of January 1, 2015:
30 yr. fixed: 3.98%
15 yr. fixed: 3.07%
5/1 ARM: 3.08%
30 yr. jumbo: 4.25%
View current rates
If you would like to stay more informed about both local and national real estate issues, you can see articles as soon as they are published. Just visit our Facebook page: http://www.facebook.com/Ahwatukee.homes and click the “Like” button. Real estate news is posted daily, and will be automatically fed to your personal “News Feed”.