2014 HOUSING INDUSTRY INSIGHTS AND 2015 PREDICTIONS

From Millenials to Seniors - Generational Dynamics Divide the Market  

Some might remember 2014 as the year that wasn't in terms of the housing market recovery.

Fannie Mae expects 2014 will finish lower in sales figures than 2013 and according to Doug Duncan, Fannie's Chief Economist 2015, while stronger than 2013 and 2014, will not be the breakout year some are expecting.

We've once again asked a group of realtors their thoughts and insights regarding 2014 and 2015.  The housing recovery particularly in New England has yet to take-off and that - coupled with pending home sales rising slightly in September to year-over-year levels for the first time in 11 months - gives many realtors hope for a more motivated market in 2015.   

"I think many buyers and sellers finally realize in 2014 that the housing market is waking up after a long sleep," shared  Lorraine Amaral of William Pitt Sotheby's International Realty, Danbury who also added that interest rates will be a huge market driver and are going to create our new market or break it.

The Generation Gap Divides

Our own prediction: 2015 will continue to be a buyer's market, particularly in Connecticut where homes are older. While low inventory has plagued the market for years, a broader disconnect exists between inventory and buyer preferences.

As more Millenials (the generation under the age of 33), enter the market and Baby Boomers downsize, the generation gap between buyers and sellers will further drive market conditions.

Younger home buyers make up the largest groups of today's consumers. According to a National Association of Realtors survey, Millennials and slightly older Generation X  represent over 60 percent of today's home buyers.

However, the bulk of the housing inventory over the next 15 years will come from retiring boomers who want to downsize and embrace a new lifestyle that doesn't include their large suburban home. It's expected 20.1 million senior households will attempt to sell their homes between 2015 and 2030, and according to University of Utah researcher Arthur C. Nelson an estimated 7.4 million won't be able to find people to buy them.

Younger buyers want an already updated home and with over 75 percent of the homes in New England built before 1990 that poses a challenge for the market. Older, outdated homes give buyers a lot of reasons to cross the property off their list.

The 'Senior Sell Off'

Sellers who adapt to the changing marketplace and understand that today's buyers don't have the same vision when it comes to updating a home will position their property in the market and stand out from the competition.  

Staging continues to be more important than ever before -- whether it is a $250,000 home or a $2 million dollar home - to preserve and in some cases boost a home's value and get it sold.  

Only 35.1 percent of home sellers nationwide think now is a good time to sell. But waiting may mean increased competition from similar style and aged homes. Staging and even low cost renovations can help sellers get top dollar in a shorter market time today so they don't become part of the 'senior sell-off'.

"It's important we offer sellers the resources to successfully sell their home now. Staging gets the properties looking their absolute best, boosting seller's confidence in listing their home today rather than waiting," say John and Joanne Hoye, Berkshire Hathaway Home Services, West Hartford. "It also helps address inventory issues by bringing to market more move-in condition homes. Quality, well-priced inventory will ultimately drive a more balanced market that's a win-win for our buyer and seller clients and staging can help us get there."