Real estate market predictions for 2014 are in from pretty much every company and reporting institution that compiles them. Chances are that you’ve already read an article or two about what we can expect.
But what you may not have heard yet is how the 2014 RE market projections will affect the house flipping sub-sector of the real estate market …
That’s what my post today is for.
Before I get into how these projections will specifically affect house flipping, I want to relay a brief overview of the projections in general.
Overview of the Projections for 2014
For the purposes of this post, I only need to relate a general overview of the trends predicted for 2014.
Here’s the gist:
- Overall, the market will improve
- Improvement is predicted to be incremental, but steady
- Home prices are going up
- Mortgage rates are going up but will remain historically low
- Mortgage loans will be easier to secure for most buyers
- Inventory of available homes will be more stable
- The market, overall, will be more stable and predictable than in 2013 (fewer and less-severe fluctuations)
Predictability is the key principle here. That’s why we care about projections in the first place, right? The more we are able to predict the market, the more we are able to make well-reasoned, solid investing decisions.
From the top-down view of all these predictions, the best news of all is that market predictability is on the rise.
How the 2014 RE Market Predictions Translate to House Flipping
You probably noticed (or deduced) that some of these market predictions aren’t necessarily positive in and of themselves, such as increased home prices and higher mortgage rates.
But every statistic and trend comes with its own set of pros and cons, and in terms of how these trends will affect house flipping, I think the results will be overwhelmingly positive.
Let me explain why.
The Top 5 Reasons to Flip Houses in 2014
1. As the year progresses, finding good deals will get easier. The inventory of available homes will be more stable in 2014, making trends in your area easier to spot as the year goes on. And fewer unforesee-ables means it will get easier and easier to develop an intuitive sense of where to find the best deals.
2. Buyers may be fewer in the higher price ranges, but the available buyers in these ranges will be more motivated to move quickly on those deals. With home prices going up, buyers who make offers on higher-priced homes will only do so if they think it’s a great deal for them. Lack of competing prices will make them want to close quickly, speeding up your flipping time.
3. More buyers, overall. Although buyers for higher priced homes may become more scarce, the amount of overall buyers (for all price ranges) will increase. This is because traditional lending standards will loosen up a little, making it easier to get a mortgage loan. More buyers = faster selling.
4. Bigger profit margins on your flips. Prices for non-distressed properties (i.e. your investment property after you rehab it), especially, are predicted to rise while prices for distressed properties will remain about the same. The math there is pretty exciting, to say the least …
5. More confidence in your investing decisions. This predictability thing is huge. The bottom line is that a more stable, predictable market will naturally lead to increased confidence as an investor. And like I’ve said before, confidence is everything in REI.
Make 2014 Your Year
So if you’re already planning to flip houses in 2014, I invite you to feel self-assured about your decision, because it’s going to be a great year. Go right ahead. Feel awesome about it!
If you’re not an investor yet but considering it, 2014 is going to be a fantastic year for new investors to start flipping, especially considering the increased predictability.
Wherever you are at in your REI plans, DoHardMoney wants to help you. I don’t bring this up much, but (thanks to all of the investors working with us) . . . we’re growing rapidly as a business this year.
In 2013 we’ve tripled our staff so we can give each loan, loan application and investor in my coaching program as much individual attention as they need to be successful. We also have a whole pile of super-exciting changes and improvements already in the pipeline for 2014 that you will be hearing about shortly.
So whatever your REI needs, we’d love to be a part of your success story. In any case, 2014 is looking really, really good for house flipping.
To Your Big Year!