{"id":16142,"date":"2015-01-07T18:58:15","date_gmt":"2015-01-07T23:58:15","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2015\/01\/economic-outlook-2015---barry-potoker.html"},"modified":"2015-01-07T18:58:15","modified_gmt":"2015-01-07T23:58:15","slug":"economic-outlook-2015-barry-potoker","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2015\/01\/economic-outlook-2015-barry-potoker\/","title":{"rendered":"Economic Outlook 2015 – Barry Potoker"},"content":{"rendered":"
\n
\"barry\n<\/div>\n
Barry Potoker, executive director, Saratoga Builders Association\n<\/div>\n<\/div>\n

BY BARRY POTOKER<\/p>\n

No one can really predict the future, but the
\npast few years have truly seen the building and
\nreal estate industries come storming back. So
\nwhere does it go from here?<\/p>\n

According to The National Association of Home
\nBuilders\/Wells Fargo, builder sentiment gauge,
\nan indicator of industry confidence, recently advanced
\nto 58, matching the second-highest level
\nsince 2005. Furthermore, with mortgage rates still
\nhovering near 4 percent and unemployment at a
\nsix-year low, more Americans have the confidence
\nto enter the market.<\/p>\n

At the same time, wage growth has been lackluster
\nthis past year and property values have
\nclimbed, making home ownership a challenge for
\nsome first-time buyers.<\/p>\n

Forbes magazine’s panel of experts on the housing
\nindustry concludes (and this seems to make
\nsense) the housing market has been shifting out
\nof rapid recovery and into a more stable phase
\nthat economists are calling the new normal. Here
\nare 10 things housing experts expect to see in 2015:<\/p>\n

1. Prices will rise more slowly.
\nHousing price gains slowed dramatically in 2014
\nand are expected to continue on that trajectory
\ninto 2015. Easing housing inventory levels and
\nthe exit of investors from the market are helping
\nto put the brakes on home price escalation. Zillow
\npredicts home prices will rise just 2.5 percent
\nin 2015 while Realtor.com predicts an annual gain
\nof between 4-5 percent.<\/p>\n

2 . Affordability will worsen.<\/p>\n

Unfortunately slowing home prices doesn’t mean
\nthat home ownership will become more affordable.
\nPrices will probably rise faster than incomes, and
\nas mortgage rates increase, affordability will erode.
\nRealtor.com predicts that home affordability
\nwill decrease by 5-10 percent in 2015.<\/p>\n

3. The buying frenzy will fade.<\/p>\n

Good news for regular people: the homebuying
\nprocess should get a little less hectic in 2015,
\nthanks to eased inventory and credit, plus the
\nexit of investors from the market. As prices rose
\nin 2014, more people put their homes up for sale.
\nMore inventory will continue to come online,
\nputting the competitive pressure on sellers for
\na change.<\/p>\n

This more balanced market will be smoother
\nsailing for everyone, both for buyers in search of
\na competitive advantage, and for sellers who turn
\naround and become buyers themselves.<\/p>\n

4. Mortgage interest rates will rise.<\/p>\n

The Mortgage Bankers’ Association predicts
\nthat rates will rise to 5 percent by the end of
\n2015 and Freddie Mac’s chief economist Frank
\nNofthaft expects a more cautious average of 4.5
\npercent in 2015.<\/p>\n

The largest group of homebuyers in the U.S., predicts
\nZillow, “Roughly 42 percent of Millennials say
\nthey want to buy a home in the next one to five
\nyears, compared to just 31 percent of Generation
\nX. As this generation matures, they will become a
\nhome-buying force to be reckoned with.”<\/p>\n

6. Rent increases will outpace home value growth.<\/p>\n

In 2015 many 25-34-year-olds will form new
\nhouseholds, but instead of buying they’ll rent,
\npredicts Truliaw. In part, this forecast is based on
\ndemographic factors and because many of them
\nwill still need to save for a down payment. These
\nfactors will continue to push the demand for multifamily
\nhousing and rents will keep rising by about
\n3.5 percent in 2015.<\/p>\n

7 . Multi family will reign.<\/p>\n

This year we’ve seen a boom in multi-family construction.
\nMeanwhile, forecasts predict a boost
\nin 2015 on groundbreakings of new single-family
\nhomes (NAHB: 837,000, Fannie Mae: 783,000,
\nand Wells Fargo: 770,000), as well as new home
\nsales (NAR: 620,000; NAHB: 547,000).<\/p>\n

Trulia’s research indicates that more people
\nwill try to sell their homes next year (and Realtor.com predicts that existing, or previously owned,
\nhome sales will grow 8 percent in 2015). The
\nentry of these previously owned homes onto the
\nmarket could suppress the demand for more expensive
\nnewly constructed homes. So builders may
\nvery well have another strong year meeting the
\ndemand for apartments and multifamily housing.<\/p>\n

8. Builders shift to cheaper homes.<\/p>\n

In recent years, builders have chosen to build
\nfewer, more expensive homes instead of more, less
\nexpensive homes. The trend–driven in part by a
\nlimited supply of land during the recovery-has left
\na price gap between more expensive new homes and less expensive existing homes, keeping new
\nhome sales around or lower than the 450,000
\nper year mark since the recession. Most analysts
\nagree that new home sales will top the 500,000
\nmark in 2015.<\/p>\n

9. Foreclosures will match pre-recession levels.<\/p>\n

From January through November 2014, there were
\n1,256,070 foreclosure filings in the U.S., according
\nto the firm RealtyTrac, down about 17.2 percent
\nfrom the same period the prior year. Watch for
\n2015 to close out the foreclosure era.<\/p>\n

10. Markets driven by fundamentals.<\/p>\n

Next year the housing market will be driven
\nmore by underlying economic fundamentals-job
\ngrowth, incomes, household formation-than by
\nmacro-economic factors such as national price
\ncrashes.<\/p>\n

In our organization, we are truly optimistic
\nabout the future of the local building industry
\nas it continues to stabilize and grow in our area.<\/p>\n

Our builders, remodelers and suppliers, are still
\nas busy as they have been over the past 3-4 years
\nsince the recovery began.<\/p>\n","protected":false},"excerpt":{"rendered":"

Barry Potoker, executive director, Saratoga Builders Association BY BARRY POTOKER No one can really predict the future, but the past few years have truly seen the building and real estate industries come storming back. So where does it go…<\/p>\n","protected":false},"author":121,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[57],"class_list":["post-16142","post","type-post","status-publish","format-standard","hentry","category-business-news","tag-business-news"],"yoast_head":"\r\nEconomic Outlook 2015 - Barry Potoker - Saratoga Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2015\/01\/economic-outlook-2015-barry-potoker\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Economic Outlook 2015 - Barry Potoker - Saratoga Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"Barry Potoker, executive director, Saratoga Builders Association BY BARRY POTOKER No one can really predict the future, but the past few years have truly seen the building and real estate industries come storming back. 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