Each New Year’s I gaze into my crystal ball (I really have one, but let’s be real here) to predict what will happen in terms of market conditions and trends for the year ahead and I do it quite jauntily for two reasons. For one thing, I cheat and look at the crib sheets of what various experts of the housing industry have to say; then, at the end of the year, if I’m found to be way off in my predictions, I can blame them. Also, I figure, you’ll probably forget what I say a full year from now. Even I can’t remember what I said this time last year.
Actually, many times I take a different position from what the experts say anyway, mainly because they speak globally and I speak locally, especially in terms of buying and selling forecasts. The New York metropolitan region is a different animal from, let’s say, the Midwest and the West Coast and certainly New York City is as different from our glorious Hudson River Valley as it can be as well. And then, there are two totally unscientific factors I add to the mix: my “gut” feeling and my cell phone. Does my “gut” tell me things will be better or worse? And, is my cell phone ringing with people calling to ask me to come and list their homes in greater number? Let me tell you, what I’ve heard ringing these days just before and after Christmas Day are not sleigh bells!
Mix all these factors together as we gather round to sing Auld Lang Syne, and here’s what to expect in the year ahead.
The value of your home will continue to increase. The experts say ever so slowly, like this year, but did they fail to consider the news announced just this week that in the last quarter our overall economy grew at its fastest rate in over a decade? I believe that augurs well for what we can expect in good news for the year ahead in the housing market. Especially in the Metropolitan area, I believe we’ll see a gain of at least five percent to six percent in the value of our homes. Maybe that isn’t the rapid appreciation we rhapsodized about in 2013 as a kickback from the Great Recession, but it’s pretty good as we move out of the rapid recovery phase to the “new normal” of the housing market.
Finally credit will loosen a bit, making it easier for first-time buyers to enter the market and as more homes come on the market, buyers will have more choices, sellers will face more competitive pressure, and that will create a more balanced market for everyone. Oh, yes, and mortgage rates will rise, according to the Mortgage Bankers Association, to five percent, by the end of 2015.
Those who observe national trends say that builders will shift to building less expensive homes, concentrating in such states as Texas, Georgia and Florida where there is still a lot of buildable land. However, in our area, with land as scarce as it is, I predict that the price of new homes will continue to escalate and more people will continue to upgrade older homes. And as the year progresses, foreclosures basically will go away.
Let’s now consider what will be trending most in home improvement jobs in 2015. The various sites that track the business of home improvement seem to disagree about which jobs are most important to homeowners and which pull the most interest. But let’s face it. When homeowners invest in home improvement, they do it not only for pride of ownership, but also for that sneaking feeling that someday they’ll get payback when it comes time to sell. So I suspect that they’ll be investing in those things that give the biggest bang for the buck in terms of recouping expenditure.
Top on the list in that regard is a new front door which recoups 96.6 percent of its cost. In descending order, we’ll be investing in new decks or patios (recoups 87 percent of the cost), adding space or converting attics into living space (an 84% recoup), replacing windows (79 percent), replacing siding (78 percent), basement remodeling (78 percent), or redoing the bathroom ( some sources say it recoups as much as 100 percent of the cost), a major kitchen remodel (over 90 percent) and of course, landscaping will be very big in 2015 with over 100 percent recouped because curb appeal becomes every important as we run faster to keep up with the Joneses.
Happy New Year, all, and take heart about the year ahead. Keep your eye on this column for encouraging news about your home’s value and market conditions as 2015 unfolds.
Bill Primavera is a Realtor® associated with William Raveis Real Estate and Founder of Primavera Public Relations, Inc., the longest running public relations agency in Westchester (www.PrimaveraPR.com), specializing in lifestyles, real estate and development. His real estate site is: www.PrimaveraRealEstate.com and his blog is: www.TheHomeGuru.com. To engage the services of Bill Primavera and his team to market your home for sale, call 914-522-2076.