…not just to buy, but to sell!
The prospects for the Ohio housing market over the next couple of years are bright, the chief economist for the National Association of REALTORS told the state’s real estate professionals.
NAR’s Lawrence Yun told attendees at the Ohio Association of REALTORS Winter Conference that home values could jump 15 percent and is looking for sales activity to increase more than 20 percent over the next three years.
He noted that Ohio was an “improving market in 2012,” with “more room to improve” going forward. “There are good signs that we’re moving in the right direction,” Yun added. He expects the Ohio marketplace to outperform the rest of the country.
Among his key projections:
• Inflation will be notably higher by 2015, rising to 4 to 6 percent. As a result, Yun expects interest rates to rise beginning in July and moving higher over the next few years. He forecasts a 5.5 percent rate by 2015.
• Meaningfully higher home prices due to increased demand and decreased supply. Nationally, home sales are expected to reach 4.69 million units in 2012 and increase to 5.1 million in 2013, 5.4 million in 2014 and top 5.7 million units in 2015. Yun noted that rising household formation, an improved job picture and lower housing inventory levels will contribute to higher prices.
• We will see more unequal wealth distribution between renters and homeowners. “Renters do not accumulate wealth and the renter population is rising,” Yun noted. He cautioned that tighter lending standards is posing a threat to many people looking to become homeowners.
Yun noted that there are potential “hiccups” that could derail the housing market’s full recovery — notably the ongoing fiscal battles in Washington, D.C. and the possibility of the mortgage interest deduction being eliminated or altered in an effort to raise revenue. With today’s historic low interest rates, the deduction has a price tag of $90 billion annually. If rates were to revert back to their historical average, the mortgage interest deduction would tally $300 billion in extra revenue.
Reprinted from OAR (Ohio Association of Realtors)
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