Friday, February 7, 2014
Orlando REALTOR® | January/February 2014
ORRA committee chairmen and brokers play along in Orlando REALTOR® magazine’s annual game of predicting market conditions for the upcoming year
"In 2014, the overall median price for homes in greater Orlando should continue to improve. Normal sales will continue to increase as we shift away from a market dominated by short sales. The New Year will most likely be a transition time from a refinanced dominated mortgage market to a purchase dominated market. Appraisal issues could continue as sellers try and push the sale prices.
More people are becoming licensed in real estate as they see and hear the buzz of another shift in the market, so our industry will see an increase in new agents trying to tap into this opportunity. As agents look to increase their listing inventory and fight for market share, pocket listings could be a hot topic for risk management in 2014.
Berkshire Hathaway HomeServices Florida Realty
Chairman, ORRA Risk Management Committee
"I expect for the rental market to continue be a growth industry. Restrictions on lending will continue to keep some segments of the market in the rental side of the industry. Another significant aspect of the rental market in 2014 is the influx of institutional investors. These units are put on the market in superb condition, which will mean that owners will have to spend more to refurbish during vacancies in order to keep up with the competition. The growing pool of renters will have better quality units from which to make their selection, which will result in a continued trend of increased rental amount as well.
Chairman, ORRA Property Management Subcommittee
"There has long been a known relationship between residential and commercial real estate. Now that we have seen a significant improvement on the residential side, I believe 2014 will experience corresponding improvements in commercial real estate. As on the residential side, there is demand from commercial buyers motivated in part by historically low interest rates; however, buyers are finding it difficult to get appraisals to match up with purchase prices.
Office properties, affected by employers wanting to do more in the same amount of space, will continue to struggle with vacancy rates of 15- 20 percent in 2014. Retail, seeing huge changes in shopping patterns in large part affected by online shopping, will continue to fight an uphill battle and will be reinventing itself on every block. Industrial will continue to do well, in part due to Internet shopping and more efficient logistics. Finally, apartments are benefiting from both hesitant or "unfinanceable” homebuyers and subsidized government agency interest rates.
Brio Real Estate Services, LLC
Chairman, Orlando Regional Commercial Council
"I will gaze into my crystal ball — well, actually my iPad works better — and foretell all that will transpire in 2014!
I predict investment buyers of single-family homes already happy with present acquisitions will continue to purchase in this sector. Foreclosures will continue to feed this cycle (a logical and proven trend).
I also predict that Gen Y, the group most hurt by the Great Recession, may well spend 2014 leasing property. They are the sleeping giant, however, and I think they’ll quietly spend this year squirreling away nest eggs only to emerge like "Angry Birds” into the single-family home market next year. Investment buyers may well take a back seat to this sleeping juggernaut if mortgage rules loosen.
I’ll risk this final peccadillo: 2014 will be the first seller’s market in almost a decade!
The light from my crystal ball — err iPad — is fading... fading... That’s all I can foresee!
--JOHN NAGLEE, Invitation Homes
Governmental Affairs Committee
"As ORRA’s 2013 chairman, one of my duties was to prepare for monthly, in-depth media interviews about our housing market. As you can imagine, I became quite knowledgeable about this topic!
Toward the end of 2013 we saw price increases slowing as institutional buying diminished. However, I believe that pent-up demand from purchase-money mortgage buyers will replace this void and challenge our still-limited inventory.
We are currently living in an incredible place, one that offers an opportunity to purchase in conditions of both low prices and interest rates. Even though I think it unlikely that the double-digit price increases of 2013 will continue, I am confident that 2014 Chairman Zola Szerences will be able to report good news during his term.
Global Realty International
Chairman, ORRA Brokers Council
"I believe that we are not at the bottom and that prices will be going down, and that there is a lot of shadow inventory that will affect prices this year.
"I think the market will depend on how the Christmas shopping season does for retailers. If more people spend that usually means things are getting better out there, but it also usually means interest rates will rise. As for short sales, it looks like the Fast Track To Foreclosure law is going to have the effect of reducing short sales and increasing foreclosures.
"When the Fed inevitably pulls back on it unprecedented asset purchase program, rates will go up and and slow the real estate industry slightly due to loss of purchasing power. However, the 20-city S&P/Case-Schiller Home Price Indices show that we are clearly still in housing bull market that should last for years to come... albeit with slower price appreciation than we've seen in the past two years.
The Realty Factor, Inc.
I think that 2014 will be a very good year for most. We will not see the kind of 20 percent increases in price that we saw in 2013, but I still expect to see the normal 5-6 percent price rises in most neighborhoods as more homes that were in negative equity positions go on the market.
For buyers, the key will be interest rates and the availability of mortgages. Buyers with good credit ratings should continue to have a pretty easy time, even if interest rates go up to 5 percent. That is still a historically low rate, so not that many buyers will be dissuaded. First-time homebuyers should have a slightly easier time securing a home as prices rise, simply because there will not be quite so many investors gobbling up properties with all-cash deals.
Demand will remain strong, as the huge gap between rental rates and mortgage payments will make even more people buyers instead of renters. That demand will keep the builders building and the sellers selling for close to asking prices.
Our market should continue in 2014 to be one of those perfect storms where buyers, sellers, and investors all profit. The only things that will prevent a very good year for real estate would be:
- A natural or manmade disaster or
- The federal government providing further intervention to wreck the marketplace.
Otherwise, a superb 2014 awaits!