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The Future Of Real Estate Market: 3 Major Predictions

After a long phase of decline and negative trends the real estate sector has finally emerged out of the blue and showing signs of progressive growth. Real estate growth picked up in the 4th quarter of 2012 and which was initially considered to be a temporary spike during Christmas holidays soon turned out to be the onset of a recovery procedure which is now expected to last for the rest of 2013 and 2014 as well.

Many experts concluded that the property market has finally hit recovery and predicted the positive growth of the sector in the future. However many investors are yet skeptical about investing in the property market since housing market portrayed such kind of rapid growth in 2009 but later turned out to be a temporary development.

Since the current growth of the property sector became visible in October 2012 many experts and market analysts have published new forecasts and predictions drawing varied conclusions of the present housing recovery in the future. Given below are some top housing market predictions that are predicted by well-known real estate experts and economic analysts.

1. Slow or modest growth: As per some experts real estate recovery is expected to continue for a long period of 2 or more years with slow or moderate growth. It is noteworthy to know that even though media has created much buzz about the real estate growth and overhyped the matter claiming it to be a boom; facts tell a different story. Most media reports are predicated on misleading factors like short-term price and sales hike, foreclosures, shadow inventory etc. while ignoring important issues like availability of rental housing units. Currently percentage of vacant homes is calculated to be around 8.6% which is much higher than the normal national average of 1.6%. Therefore even after 6 months of recovery there is still a considerable amount of vacant homes left and it will take a long time for it to reach the normal benchmark.

2. Housing market equilibrium in 2014: The present housing market growth is expected to reach a halt by the fourth quarter of 2014. One of the primary reasons for the present growth of the real estate sector is the government's new policy according to which property mortgages are made available at low rates to property buyers. Due to this new plan more investors borrowed money for buying property which resulted in the current growth of real estate sales. However this government scheme is not meant to stay forever will probably last for the present year. Further the present growth is causing property prices to incline which means buying property will be an expensive affair in the coming months. Thus with high property values and property mortgages available at high rates, property sales will possibly go down in the future leading to a housing growth becoming stagnant and stable in 2014.

3. Short term recovery and collapse: As per some experts property market will probably fall in the coming days because of an upcoming recessional event that will hit the economy by late 2013 or early 2014. Real estate is highly vulnerable to market downfall and recessional events and an approaching event of such kind will evidently cause a setback for the housing market making it go down again. Read more Michael Lombardi Financial Predictions