What will 2013 look like for Real Estate?

Question

Hey everyone - today on the  BiggerPockets News  page there is an article about what 2013 will look like for real estate, according to mortgage giant FreddieMac.  (Read the article  here. )

Just wondering what you all think 2013 will look like?  (Nationally or locally...)

James Vermillion · Answer

I noticed no one had responded to this yet...I am curious as to what BP nation thinks.  Obviously we are in an interesting time with the so called "fiscal cliff" looming.  Overall though, I expect my market to look much like it did in 2012, during which the market tightened up, properties sold more quickly and investor competition increased.  I believe these trends will continue at a similar pace during 2013...but deals will still be out there.

We are starting to expand our operation to include rentals, just put our first one under contract a few weeks ago and will be looking for number two in the near future.  I believe the rental market will be very strong for the foreseeable future and we love the idea of being able to finance these rentals at such attractive rates.  We plan to continue rehabbing and selling to gain capital to both purchase more rentals and expand our flipping operations.

I am curious as to what others, especially those in more "dynamic" markets are expecting and what adjustments they are making.

Kyle Hipp · Answer

I believe the home prices will grow slightly but overall remain fairly flat. I have a great deal of confidence that mortgage rates will remain extremely low for all of 2013. Rental prices will continue to their above average growth rates as demand remains high and vacant properties merely trickle back into the market.

I see an increasing theme being shifted to population dynamics. I see more and more baby boomers hitting retirement, which opens up their homes as they move to a place they love or downsize. The large 20s - early 30s age group benefits from job vacancies left by the boomers but are also more skidish to purchase homes as they have seen the dangers and don't wanna deal with the hassel of homeownership and tend to change jobs and even careers more than their parents. Many will still buy leading to higher home prices but nothing out of control.

I see lots of opportunity in the yeara to come. My view is of course skewed because of my location in Wisconsin. I live in the fox valley area 30 minutes south of Green Bay which has remain relatively stable through the years which I believe makes the population dynamics more of a economic driver.

Brandon Turner · Answer

I'm with James Vermillion - Sure, they will create some competition in a few markets and certain price points - but overall I don't see it as a big issue.

My prediction (locally) is that my area will continue to suck for selling property  :)   On the other hands, rents will stay where they are so the rental market will continue to flourish.

Nationally - I expect a decent, steady rise in values. Nothing crazy, yet, but I see an emergence of wholesalers once again as prices go up. Not a bad thing.

Thoughts?

James Vermillion · Answer

Fear sales publications and gets ratings!  While it is true that funds and institutional investors are buying properties, I do not believe it will put a lot of small investors out of business.  It is important to stay up on current events, but at the same time I don't believe a lot of what I have read.  If you continue to monitor your market and adjust your strategy when needed you will continuously be successful.

Charles Smith · Answer

The news from WSJ is hedge funds are investing heavily in single family homes
committing to add thousands to their portfolios.Its wall street again.They add
substantially to the bottom line if most of us are turned into renters.It also is
going to put a lot of the small investors out of business.Take a look at some of our sites and publications. The information is scary.

Mike H. · Answer

My 2013 forecast:
I think prices are going to go up.
I think new construction is going to pick up noticeably.
I think rentals will continue to be in high demand.
And I think flipping will become a legitimate option again.

Marc Bodinger · Answer

Assuming a fiscal cliff deal is agreed upon and we don't go over the "cliff" I think all property types in the NY/NJ area will continue to perform well. There have been a lot of deals in recent months because of the fear of higher taxes coming online in January.

What will 2013 look like for Real Estate?

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