What’s on tap for 2015?

We’re on the cusp of the calendar flipping to a new year. What will 2015 bring to the real estate market? The National Association of Realtors offers five predictions for the coming year. Let’s give them a look, shall we?

1) Mortgage rates are going to once more head for the sky. With a robust economy behind growth in jobs as well as income, the flip side is that the rates honeymoon has passed and rates are on tap to go back up. According to the Federal Reserve, the federal rates fund (which has a serious if indirect effect on mortgage rates) is going to be increased in 2015. That’s the first time since 2008. “Our forecast for housing assumes the 30-year fixed rate will reach 5 percent by the end of 2015,” NAR chief economist Jonathan Smoke said in a statement. “The one-year adjustable rate will likely rise less if much at all, and accordingly, we are likely to see a shift into more adjustable and hybrid mortgages over fixed.”

2) Millennials are beginning to buy. Those young folk born between 1981 and 2000 are starting to emerge as homebuyers – and, in fact, according to NAR about 65 percent of first-time buyers are in the older millennial group aged 25 to 34. Of those who are buying, an estimated 86 percent are doing so because of a change in family size.

3) Builders will get busy. Smoke said in a statement that housing starts are in a position to pick up the pace and shift in focus. “We are forecasting 16 percent growth in starts, driven now more by growth in single-family starts, which we are expecting to grow 21 percent,” he said. However, single-family construction will be limited by shortages of materials and labor.

4) Credit remains a consideration. Many consumers, particularly younger ones, are prevented from buying a home with a bank loan due to strict qualification standards. The housing market may find itself constrained by this lack of access.

5) The foreclosure crisis is at its end. Foreclosures skyrocketed seven years ago with the burst of the housing bubble, but we’re looking to close that out in 2015, with local variations by area.

Happy 2015!

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com