Considering selling or buying a home in Hot Springs Village next year? Here are some notable predictions:
Home Values: In the 52 largest markets in the United States, home values rose about 12% in 2013. According to Zillow Research, this will fall dramatically to only 3% in the coming year. This is due in part to a rise in interest rates, fewer foreclosures and more new construction. And, while the Village didn’t participate at all in this price appreciation last year (negative 1% to be exact), that doesn’t mean that prices won’t see some appreciation.
“Hot Springs Village Real Estate has largely missed the rise in prices experienced throughout the country,” said Hollansworth. “Many buyers are realizing how far their money can go in our market and are looking to take advantage of this in the months ahead. New construction, although a bit ahead of last year, remains at a decade low in the Village and won’t crowd out re-sale home sales.”
Mortgage Rates: Most analysts, including Zillow, agree that mortgage rates will eclipse the 5% mark in 2014. That will put downward pressure on pricing because every point increase raises the typical mortgage in the Village by $120 per month (assuming a $200K home). “However, mortgage rates around 5% would still be low on a historical basis and would continue to allow the housing market to grow in 2014,” said Hollansworth.
Home-Ownership: Although many people still believe homeownership is part of the American Dream, Zillow predicts that homeownership rates will fall to their lowest level in nearly two decades. Along with a weak labor market, foreclosures will continue to displace homeowners and keep rental demand high.
“The dilemma we face in the Village,” said Hollansworth, “is competing with Boomers who are “retiring in-place” as well as competition from other communities that offer an array of amenities; some of which the Village offers and others that we are just now addressing.”
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