2013 was a good year for the real estate market and home values. Home prices increased between 10 – 13% nationwide depending on the reporting source. Tallahassee increased about 1.5%. How will home value trends in 2014 look for Tallahassee?
Home Values Will Trend More Slowly
Most economists and real estate market experts expect home values to continue an upward trend through 2014, but at a slower pace than 2013. Home values historically have not risen much faster than the inflation rate. With inflation under 2%, it’s hard for home prices to sustain double-digit growth over the long term. Look for home values growth to be in the single digits. Clear Capital, a provider of real estate data, expects prices to grow at 3-5%. Kiplinger, a financial adviser, forecasts growth to be 4%. For Tallahassee, that means a typical single family home valued at $200,000 now may be worth $208,000 by the end of 2014
Economy Will Drive Home Prices One key question facing home values will be the Federal Reserve’s plan to scale back quantitative easing, and how this will affect mortgage rates. Rising rates will put a damper on the demand for homes, and slow home price growth. Another variable will be how fast unemployment drops in 2014. Employment levels and wage growth are key drivers of home values.
Would you like to see how much your Tallahassee home value should increase in 2014? Contact us for a free valuation. 850.445.2476