Consumer confidence in the housing market is surging upward, but surveys of REALTORS® indicate agents aren’t so sure the market is fully back to health, NAR’s chief economist said Friday.
“That’s odd because REALTORS® are really optimistic,” said Dr. Lawrence Yun, speaking at the Residential Economic Issues and Trends Forum at the 2014 REALTOR® Conference & Expo held in New Orleans.
Yun noted that this uncertainty on the part of real estate practitioners may be unfounded. He said pending sales numbers are trending back up after a brief dip.
Homeownership is at the lowest level in 20 years, Yun said. That number could further decrease “until we convert good renters into homeowners.”
The declines in homeownership are evident in most age groups. Younger people are struggling with employment, may be saddled with student debt and are putting off starting families until later in life.
The bright side: Younger people do eventually want to get out of their parents’ basements. That could provide opportunity for the real estate market.
Among other points in his talk:
- Sales are likely to come up a little short nationally versus last year.
- Single-family housing starts are at half of normal levels. Smaller builders have struggled to get the capital to finance projects, and have been “essentially sidelined,” Yun said. Larger companies that are backed by Wall Street are faring a little better.
- Multi-family housing starts are back to normal, a stark contrast for single-family starts.
- Looking across the real estate landscape: San Francisco and Miami are seeing astronomical gains in home values. Silicon Valley companies are a driver in the Bay Area, and foreign investment is a factor in Miami.