This is a guest blog post by Andy Fulton, community manager for Market Leader.
Real Estate is Back!
In the years following the 2007 collapse of the U.S. housing market, it sometimes seemed like real estate would never be able to bounce back from the rock-bottom low it had reached. A recent survey of 2,430 real estate professionals conducted on ActiveRain, the world’s largest real estate social network, found that this scary prospect will most likely not become a reality. The survey respondents, who work as real estate agents, brokers, appraisers and home inspectors (among other professions), expressed unbridled confidence that 2013 will be a good year for the beleaguered U.S. market.
The RealEstate.com team created the following infographic using the results of the ActiveRain survey. It will become clear as you read it that real estate really is back!
<a href=”http://www.realestate.com/advice/real-estate-market-is-back/” title=”Real Estate Is Back Infographic”><img src=”http://www.realestate.com/advice/wp-content/uploads/2013/03/RealEstateIsBack.jpg” title=”Real Estate Is Back Infographic” alt=”The future of the U.S. real estate market in 2013 is bright” width=”600″ height=”1872″/></a><br />
<a href=”http://www.realestate.com/advice/real-estate-market-is-back/” target=”_blank”>Real Estate Is Back – 2013 ActiveRain Survey </a>
Regional Real Estate Market Trends
Just as the housing market collapse hit some regions of the U.S. harder than others, real estate professionals anticipate that the benefits of the housing market recovery will be unevenly distributed.
Realtors in Arizona and Florida, two states that were thrashed by the housing market collapse, expect to see rapid appreciation in housing prices in 2013. Whether real estate values will be able to rise to pre-crash levels in the near future remains to be seen. Shadow inventory still plagues these states, and their recovery will be hindered until these bank-owned have left the market.
The future is probably brightest for the Texas real estate market, both in 2013 and many years down the road. Real estate professionals in four major markets – Dallas-Fort Worth, Austin, Houston and San Antonio – are all expecting to see long term growth. Texas real estate markets are bolstered by the state’s strong economy in sectors as varied as the high tech and oil industries.
If Texas is the bright spot of the U.S. real estate market, New England is the market farthest from it. New England realtors expressed the least confidence out of all the ActiveRain survey respondents due to the region’s relatively high taxes and low economic growth.
How the U.S. Real Estate Market Will Perform in 2013
Real Estate Values: 84 percent of the ActiveRain survey respondents believe that real estate prices will increase in 2013. This is a 133 percent increase in confidence over 2012! Such a massive improvement in realtor confidence is great news for the millions of Americans who are still strapped with underwater mortgage loans.
Real Estate Transactions: 84 percent of U.S. real estate professionals believe that real estate transactions will increase this year, and 17 percent believe that transactions will increase dramatically. Real estate transactions are arguably the most fundamental indication of the health of real estate markets, so respondents’ confidence that they will increase is a wonderful portent for this upcoming year!
New Construction States: Perhaps the largest impediment to the housing market’s recovery has been a lack of new homes. Shaky builder confidence and high costs for construction materials has kept the number of new building permits issued by cities across the country at levels lower than what experts predicted. Fortunately, ActiveRain survey respondents believe that new construction starts will rise 77 percent in 2013, an 83 percent increase over last year.
Local Economy: While real estate professionals believe that local economies will improve in 2013, they have less confidence in them than they do in any other aspect of their real estate markets. 74 percent of survey respondents stated that their local economies will improve in 2013, a 40 percent increase in confidence over what they expressed in 2012.
Will the Teetering Canadian Market Impact the U.S.?
While American real estate professionals expressed an abundance of confidence in the ActiveRain survey about the direction their local markets are headed, their Canadian counterparts anticipate declines in everything from real estate values to the health of local economies.
Canadian realtors’ lack of confidence is largely caused by fears of overbuilding. Canadian homebuilders have produced homes in astonishing numbers since 2000 and are continuing to do so, despite warning signs that the country’s housing market might be saturated. Consumer debt brought on by skyrocketing housing prices and cost of living has also raised concerns that their ability to buy homes will soon dry up. Moody’s Investors Service, the world’s oldest and most prestigious credit rating agency, downgraded six Canadian banks due to their “exposure” to rising consumer debt there.
While it is unlikely that Canada will experience a housing market collapse even remotely close to the disastrous one the U.S. has suffered through for the past half decade, hardship in Canada might have cross-border consequences. In April, an analyst for a U.S. research firm predicted that a housing market collapse in Canada could take the country’s economy down as well. If this were to happen, Canadian economic woes would deprive the U.S. real estate market of its largest group of international investors; Canadians comprised 24 percent of the foreigners who purchased houses in the U.S. in 2012, spending $9.4 billion. Losing these billions would damper – albeit not dramatically – the recovery of U.S. real estate.
Andy Fulton is a community manager for Market Leader. He has worked as a content writer, blog manager and social media guy for several companies in the Seattle area since graduating from the University of Washington last June.