2013 Saw a Rebound in the Housing Market. What’s In Store for 2014?

The Fort Myers News Press says the housing market rebounded in dramatic fashion last year.

Here’s a recap of 2013:

At the end of last year, permits to build new homes were up while foreclosures were down.

New home permits went up a whopping 40 percent while foreclosures fell by 45 percent rounding out the New Year.

Statistics from the Southwest Florida Real Estate Investment Association showed that foreclosures fell from 7,600 to 4,212.

And there were almost 1,000 more permits for single family homes in 2013 compared to 2012. In 2012, there were 1,707 permits. In 2013, there were 2,386 permits.

“I tell you, it’s picking up pretty good and of course there are more new builders that have taken the opportunity,” said Bob Knight, vice president and co-owner of Cape Coral-based Paul Homes.

The Demand for More Housing in Lee County

Since the market is rebounding, there is an increased demand for new homes in Lee County because few homes have been built since home prices shattered in 2005.

However, unfortunately there is not enough labor out there right now, according to Knight. There have also been price and wage increases “all over the place”, says Knight.

What the Housing Market Will Probably Look Like in 2014

The USA Today says that the 2014 housing market isn’t likely to be as exciting as it was in 2013. They say to look for single digit gains, not double digits while existing home prices are likely to stay at last year’s level.

Home prices were the focus of the 2013 housing market. They were up 12.5% in October year over year, CoreLogic says. Prices are now 20% off their 2006 peaks after falling more than 30%, according to the Standard & Poor’s Case-Shiller index.

Economist John Burns predicts a 6% gain in 2014. Many others see smaller increases ahead, according to the article. Zillow forecasts half of that at a 3% rise.

Good News for Home Buyers

November’s data showed an improvement for new home construction, with housing starting to tipple $1 million on an annual basis, the Commerce Department says. That number was up almost 30% from last year; however it’s still far below the norm. To put it into perspective, starts averaged 1.5 million a year before the mid-2000s housing boom.

But the good thing is that it’s getting better.

Construction won’t return back to normal this year, but it should strengthen enough to become the main driver of the housing market recovery initiative as home price gains shrink, says investment manager Goldman Sachs Asset Management (GSAM).

New home construction means more jobs for construction workers, civil engineers, plumbers and other professionals in the building trades.

Construction alone will add 300,000 to 500,000 jobs a year to the nation’s job force for the next three years, GSAM predicts. That’s up from about 100,000 in 2013.

Hopefully it will mean good things for southwest Florida’s economy. We will keep you posted.