Seven major trends in U.S. real estate this year

Seven major trends in U.S. real estate this year After the U.S. real estate crash in 2008, nearly 16 million houses have become negative equity in the past five years. Silver is the main market, and most...

After the U.S. real estate crash in 2008, nearly 16 million homes became negative equity in the past five years, and most Americans lost confidence in the real estate market.

Last year, the real estate website Trulia conducted a survey of 2,000 adults. 61% of the respondents expected that the real estate market prices will increase this year. 58% of the respondents said that it will take at least 10 years for housing prices to return to the peak level in 2008. Nearly 80% of renters said they plan to buy a home in the future. Whether or not respondents are overly optimistic, the signs of an upturn in U.S. real estate are hard to ignore. In fact, in October last year, home prices across the United States had risen for eight consecutive months, jumping about 6.3% compared to the same period last year, which was also the largest increase since June 2006.

California is one of the areas hardest hit by the real estate disaster. It is expected that 57% of residential homes will be sold this year, which will attract more home buyers to compete. In Florida, real estate agent Marge Peck points out that real estate is making a comeback in places like Phoenix, especially for homes priced under $150,000.

Can the U.S. real estate market continue this trend this year? Most experts say the forecast relies on mainstream economic growth this year and they believe the economy will not suffer a serious gap. Other experts stress that all housing markets are local, meaning conditions vary widely between coastal metropolitan areas and midwestern towns. With those caveats aside, here's a look at where real estate sales are expected to go this year. (1) Rising housing prices

The slow completion of new houses has pushed up prices and costs, and this trend will continue this year. Calvin Schnure, an economist with the National Association of Real Estate Investment Trusts, said 1.25 million to 1.5 million new homes and apartments need to be built each year to keep up with population growth. However, in the six years since the housing market crashed, only 500,000 new homes have been built, effectively creating a supply gap in the market. Mark Dotzour, chief economist at the Texas Real Estate Research Center, said average home prices are forecast to rise 5% this year.

(2) Rising rents

Calvin said there is a huge demand in the rental market, with about 3 to 5 million young people aged 20 to 30 who moved back to their parents' homes or lived with friends during the recession. Now, when they start looking for jobs, they will be looking for their own apartment. In percentage terms, rents would triple or more, Calvin said. This year, for young people looking for a rental market, it will be a challenge if they really need a little luck. He said that this year, the national average rent is expected to increase by 4%, and metropolitan areas are expected to increase by 7% to 9%.

(3) Silver main projects with less negative equity. Home buyers who want to buy cheap silver main projects and foreclosure houses may have fewer and fewer opportunities. Foreclosure sales dropped from 28% in March 2011 to 11% in June 2012. The main reason is that the Federal Housing Finance Agency (FHFA), the Federal Deposit Insurance Corporation and banks have sold out thousands of foreclosed homes. The buyer agrees to purchase a large quantity at a low price and agrees to be responsible for negotiating new terms with the borrower, rather than simply being dealt with the house in negative equity. The number of foreclosures has fallen as thousands of borrowers' financial conditions improved and rising home prices helped pay off their mortgage payments.

(4) More first-time homebuyers

A report by Deloitte & Touche LLP predicts that the demand for single-family homes will grow significantly in 2013, mainly driven by first-time homebuyers. This trend can be seen from the survey of home buyers and sellers in November last year. 39% of mortgage borrowers were first-time homebuyers, compared with 37% in 2011, which is a significant increase.

(5) The cost of housing construction will increase significantly

The price of housing construction materials, such as slate, wood, copper, etc., will increase significantly. Although the number of housing construction remains below the level, there is a shortage of talents in the construction industry, and many qualified construction workers immigrate or transfer to other industries. Therefore, the result will be to push up construction costs, whether it is building materials or labor costs, which will also increase significantly compared with last year.

(6) Property management personnel

This year is expected to be a year of huge profits for property managers. At the beginning of the year, some property managers began to sell multiple foreclosed properties, agree to hold and manage them with large institutional investors, or transfer them to the rental market. Of course, the trend of investors acquiring distressed assets for rent will become more and more intense. According to data from real estate developers, the number of home buyers who invested in real estate in 2011 increased by 65% ​​compared with 2010. Currently, many investors use professional property management companies to take care of the rental and maintenance management of their homes, creating huge demand in this industry.

(7) Loose credit standards

On average, last year, borrowers needed a credit score of 760 or above to obtain a mortgage loan. Compared with the peak period of real estate, the standards were higher. That situation will begin to change this year, said Luis Vergara of New York City Capital Advisors. Credit standards will fall, and more buyers with co-payments will enter the real estate market, which may create competition among lenders and help provide loans to homebuyers.