2015 OUTLOOK

2015… it’s a time to revel in anticipation of new opportunities. While some of us may say goodbye to 2014 with hesitation, others are more than ready to close the door if last year turned out to be a challenging one. No matter what our individual situations, looking ahead, we can feel positive about the coming year and embrace what awaits us.

The economy

It appears that 2015 may be the break-away year when the economy will have finally gathered enough momentum to break out of the uneven recovery trends of the past few years. The post-recession growth we have experienced will be even more apparent as the year goes on. Here’s why:

The unemployment rate continues to decrease and will soon be at the levels we were experiencing before the Great Recession:

The number of jobs continues to grow and strengthen:

Most importantly, we have reached a point where there is pressure for income growth:

Positive wage growth is a key factor, one that has lagged behind the first two. Because wage growth has been essentially stagnant since the end of the recession, many consumers have experienced a decrease in net income. Now, the improving job market and lower unemployment rate have gained enough momentum to force wages upward. This, together with the unexpected significant drop in energy prices and consistent deleveraging over the past years, has revived consumer confidence to its highest level since before the recession.

The real estate market

What does this mean for the real estate market?

After the dramatic boom of 2005 and 2006, the market hit bottom in 2011. We saw a “mini boom” of pent-up demand in 2012 and 2013. We began 2014 with terrible weather, and then as the year progressed, it seemed the pent-up demand that created the mini-boom was satisfied. But this lull was only temporary, and by the end of the year our real estate market once again experienced slow but steady growth. I’m optimistic we will see this trend continue. Like the economy, our real estate market has reached a point of consistent positive growth which will become more noticeable as the year goes by.

Will interest rates rise?

After taking an unexpected dip in the fall, interest rates are close to record lows. But they are almost certain to begin rising in 2015. It will probably be a gradual change, but it’s important to remember that lower mortgage interest rates translate into more buying power. Your Trident mortgage consultant can help you determine just how much you can buy at these lower rates.

What about home prices?

Residential real estate values in our market have flourished in the past ten years. In fact, they are up by almost 25%! This positive trend is especially reassuring given that the country’s worst financial downturn since the Great Depression also occurred during this time.

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~ by marilynotis on January 13, 2015.

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