Home prices expected to rise 10 percent

After several years of slow recovery, the nation’s housing market — as a whole — began to show signs of improvement in 2013. Some homeowners saw their home equity grow as home prices rose and single-family home sales increased. However, the market still has its challenges and Realtors remain committed to helping build a responsible, sustainable housing market in 2014.

According to the National Association of Realtors, 2013 was a recovery year; once the year-end numbers are crunched, annual existing-home sales are expected to increase 10 percent over a year ago, and national median existing-home prices are projected to be 11 percent above last year.

The 2013 market also experienced a shortage of housing inventory. NAR data shows nationally the inventory level dropped to a record low of 4.3 months-of-supply in January 2013. Recently however, inventories have started to increase — current unsold inventory is equal to a 5.1-month supply of homes.

In Orlando, several years of extremely tight inventory contributed to soaring price gains, explains Orlando Regional Realtor Association Chairman Zola Szerencses, RE/MAX 200 Realty. “Orlando’s median price has increased 44 percent over the past two years,” says Szerencses. “That increase has helped lift many homeowners into positive equity again, and foreclosures and short sales have declined. When homeowners benefit from price appreciation and housing equity increases, this helps the economy through greater consumer confidence and spending.”

Despite these positives, housing affordability for some buyers declined in 2013. NAR predicts affordability will continue to decline in 2014 if mortgage rates continue to rise, and particularly if qualifying for a mortgage remains difficult. Realtors believe mortgage availability will only be worsened by regulatory reforms stemming from the Dodd-Frank Act Wall Street Reform and Consumer Protection Act that go into effect in January 2014.

“While these new rules reduce risky loan products and establish critical lending protections for consumers, they could also preclude many potential home buyers from entering the housing market,” says Szerencses. “Qualified buyers with good jobs and strong credit histories cannot continue to be turned down for loans. Lenders need to return to sensible lending standards this year.”

Szerencses says Realtors remain actively involved with lawmakers to ensure housing and homeownership issues are first on the nation’s public policy agenda this year. Several critical issues affecting housing will take precedence this year, including:

• Delaying further flood insurance rate increases

• Preserving of property and homeownership tax policies

• Creating healthier housing and mortgage markets through legislation and regulations.

“Despite the challenges of the coming year, I believe Realtors are feeling confident and optimistic about the future of our nation’s housing market,” says Szerencses. “Homeownership is an investment in our future, and I believe 2014 will present tremendous opportunities for buyers, sellers, and investors.”