When looking at the forecast for the upcoming year, I always start with growth in the job market. The U.S. job market overall has had strong upward movement this year and the Tennessee Valley has been one of the shining spots affected by this. In recent years, we’ve seen a strong emphasis by local and state leadership on encouraging business development in our area and continued efforts to solicit companies to relocate or expand into the Huntsville/Madison, and Tennessee Valley areas. These efforts by our local mayors, chamber of commerce leaders, and our governor have led to many exciting developments this year and leading into the new year.
We are currently in an environment where the economy is growing at its strongest pace since the global financial crisis while long-term interest rates are holding at record lows. A combination of these factors with the decrease in oil prices and the increase in job growth results in a golden moment for real estate in the Huntsville and Tennessee Valley areas.
We currently have both novices and financially savvy investors reaching out to us right now as they see the birth of this exciting year ahead filled with opportunities locally. The facts and reports are out there for everyone to see and I am not sharing anything that is not public information. However, one must read and digest this information to realize the opportunity on the horizon.
As I review the data released and make my projections for interest rates in 2015, I, along with most economists, am quite surprised that the rates have stayed this low throughout 2014. Most predicted the rates would be somewhat higher by this time of year but the slowdown in global economic expansion is leading investors to seek safe assets. These factors are helping to keep mortgage rates at low points. As the pressure eases into 2015, the federal funds rate is likely to be raised which could inch mortgage rates closer to 5% by mid 2015.
As for the projection of home sale prices for 2015, I do believe we will see increased prices but not comparable to what we have seen in the past couple of years. Rather than double digits, I believe sales price growth will be in the mid-single digits. This price growth projection is dependent upon whether or not the inventory, and in particular new construction, will come online and remain stable in production. Our current monthly inventory rate is strong and leaning towards a buyers market. However when you review this past year, you’ll notice inventory has lowered as purchases are remaining steady. New inventory is not increasing enough for expected demand.
Job growth or strong economic boasts of 2014 in Huntsville/Madison area included the following:
- Boeing expansion
- Calhoun Community College expansion
- Intergraph new building
- Town Madison retail/commercial development
- Torch Technologies wins $70 million dollar project
- Whole Foods
….And many more
This Week’s Closings, Congratulations!
Ms. Amanda Honeywell
Ms. Janet Phillips
Mr. Thomas Hines of J.E. Home Development
Ms. Sheila Moore
Ms. Elfriede Couch
MR. Ivan Fernandez
Mr. and Mrs. Raymond Berry
Ms. Carolina Marlow
Mr. Juan Suarez
Mr. Christopher Phillips
Mr. Donald Tabb
Mr. and Mrs. Christopher Walters
Mr. Cody Dennison
Ms. Emily Stephens
Mr. and Mrs. Michael Dyson
Mr. and Mrs. Jimmy Pleasant Jr
Mr. and Mrs. Joseph McGinty
This Week’s New Listings For Sale: