In 2014, more and more houses became less affordable for homebuyers. This was most likely the reason for the decline in sales. Because of the prices increasing, first time homebuyers were not able to buy the properties they wanted. First time homebuyers just stuck with their rent and let the sales of properties go into the hands of the wealthy, those who could actually afford it in the prices that were offered. Hopefully, in 2015 the situations will be more different. Here are a few predictions with what may happen in real estate this year:
- There will be a lot of property that will be on sale. Homebuilders are likely to respond to improvements of household formations and more homeowners will more likely sell their homes.
- Mortgage rates may rise, which may or may not be good news for homeowners and potential homeowners. But based on rational economics there is a chance that it will, but no one actually knows what may happen until whatever it is actually happens, right?
- Prices of homes will go down. Some may already be decreasing because most real estate properties that are way too expensive will not sell unless the wealthy are interested in the location and the property, but other than that the seller is out of luck. Also, the cause of real estate decreasing could be the possibility of more properties going on sale. If more properties go on sale, there is more competition and prices may decrease. Do not hope for crazy decreases on price though!
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