There are plenty of places where you can find predictions about the real estate market in 2014. I don’t have a crystal ball, so I don’t make predictions. But I will tell you that there are several facts that point to a trend of increasing relocation in 2014. Taken together, these factors may drive people to make the decision to leave their current locale for one with a better cost of living, likely making 2014 the “Year of the Big Move.” Here’s why:
• The Federal Reserve announced last week plans to begin tapering the Quantitative Easing that has kept mortgage rates historically low during the recession and nascent recovery. Wall Street responded favorably, but for Main Street, this move means higher mortgage rates. For many would-be homebuyers, an increase of 1 percentage point could make monthly mortgage and interest payments in their current area beyond their reach.
• Pay is not keeping pace with home price increases. That means homes are getting more expensive faster than our wages can keep up. This combined with increasing mortgage rates is driving affordability down in many higher-priced markets.
• The recession took its toll on many people, whose personal wealth eroded considerably, and we are entering a rebuilding phase, in the economy, the housing market and for individuals. Rebuilding in their current area may not be an option.
To read the remaining reasons why 2014 is going to be the “Year of the Big Move” and hear an audio interview with Charlie Young, visit ERA’s blog, “Owning the Fence.”