What ahead for the housing market in 2014
Low-End Home Prices Are a Forward-Looking Barometer of Overall Home Prices
Sam Khater | Housing Trends
Analyzing low-end versus high-end price trends reveals two stylized facts. First, low-end price changes and levels lead high-end prices and levels by six months to a year. The low-end price trend in March 2011 was clearly foreshadowing that the market was set to recover. Second, low-end prices are much more volatile than high-end prices, which sometimes makes turning points easier to catch. The primary reason for this is that the three major buyers of low-end priced homes are typically first-time buyers, lower-income repeat buyers and investors. For different reasons, each of these buyer segments is more sensitive to economic trends than buyers at the higher-end of the market. Low-end prices can serve as a forward-looking barometer for overall real estate prices that is magnified when looking at metropolitan markets.
After reading over the article, he indicates that the low-end price correction is over and that overall price growth will be markedly slower heading into 2014.
I agree that the housing market is going to continue to increase in the first half of 2014, but I do question if the real estate recovery will continue to increase in the second half.
In my opinion the real estate recovery was spark by overseas investors and Wall Street money.
It’s not the type of recovery that I would like to see in a good real estate recovery.
The first time buyers, the buyers that needed financing were somewhat lock out of this recovery and now that prices have stabilized and the comparable homes prices are no longer so far apart from the last sale in an area, they will be able to buy, but will they offer more or less then the last sale in the area they purchase.
I am your real estate expert and consultant in Chino Hills and surrounding cities. The the number of homes that have expired, that came off market has increased and the number of homes that have reduced their prices to sell has also increased.
I do look forward to a good housing market, but not the type of market that we had in 2013
What do you think?
Do you think that low-end markets are a good indicator for the rest of the market?