As I prepare for my annual “looking forward” blog, I always go back and read the post from the previous year. And after doing that this time, I feel like I could almost cut and paste last year’s blog into this one, and simply change the date.
With all due humility, I must say: last year’s predictions were really accurate. But what about 2014?
A few years ago, the Las Vegas real estate plunged into a deep, dark abyss. We really crashed, and hit absolute rock bottom. The climb out of the hole has not been a fast or an easy one. But we have been climbing out, and in 2014, that will continue. After radical adjustments and a firm push on the reset button, and after a few wild swings of the pendulum, the market continues its trudge toward normalcy.
In fits and starts, the Las Vegas real estate market will keep improving in 2014. There will be fewer foreclosures; fewer short sales; fewer investors; more traditional sales; higher prices; and quite possibly, higher interest rates. I predict that sales activity will remain at a similar level to 2013. But that activity, once again, will be handled by fewer and fewer real estate professionals.
I also think that inventory will increase in 2014. There should be a slight tightening of supply from March through August. But inventory levels this year will be closer to a normal market. We should not experience the incredibly short supply that occurred for the better part of 2013. And even though the quick run-up in prices in 2013 was interesting to watch, and good for some sellers, it was not healthy, and not indicative of a solid, dependable, stable real estate market.
The wild card in the equation, once again, is interest rates. They have been ticking upwards, and I expect that trend to continue. I don’t expect a major rise in rates, though. And from a historic perspective, rates are still quite low and borrowing money to buy a house is an inexpensive proposition these days.
As of this writing, the Mortgage Debt Forgiveness Act has expired (December 31, 2013). It is likely to be reinstated somehow in the coming weeks, but that is not a sure bet. If it is reincarnated in some fashion or another, the number of short sales may bump upward in the very short term, but that will not last, and by the end of the year, short sales will constitute a smaller percentage of transactions than in 2013.
For the real estate professionals who may be reading this blog, you already know that our business has gotten tougher and tougher. I know that many of you are suffering financially. And I know that some of you will not make it this year. But I encourage you to seek out a Broker who can provide excellent, topical training and ongoing support. Keep your costs low by switching to a 100% office that does not charge monthly fees (like TR Realty!) Those factors are more important than ever before. Real estate is very different than it was even five years ago, and many seasoned professionals make the mistake of resting on their laurels, and letting their pride and egos get in the way of seeking out training and support. Those agents are destined to fail. Believe me: past performance is in no way a prediction of future success.
Today’s market conditions are tough and unpredictable. The days of simply taking orders from uber-eager buyers and cashing five-figure commission checks are over. Real estate is a full-time, serious profession (as it should be!), not a hobby to be practiced part-time or on the side. And the disparity between the agents who are succeeding and those who are failing, or merely subsisting, is growing greater each year. Commissions have to be earned. And each transaction is like a work of art. Closing one can no longer be taken for granted. And the success in our industry is rightfully in the hands of those agents willing to be trained and coached, those willing to work harder than ever before, and those willing to dedicate themselves completely to the pursuit of real estate excellence.
From my own perspective, I have virtually unbridled optimism about TR Realty’s outlook for 2014. Our sales were up 20% in 2013 over 2012, and I expect that number to be repeated this year. Our property management division is on fire, and my expectation is an increase of 30-40% this year in the number of managed properties. TR Realty will launch a commercial property management division early in 2014, with an increase in commercial sales sure to follow. Our web site is better than ever. Our infrastructure is rock solid. Our office staff is the best in Las Vegas. Our location cannot be beat. Our training classes are amazingly popular and incredibly beneficial, and getting better all the time. Our market share is growing constantly. We are financially strong, environmentally friendly, technologically savvy, internationally diverse, and a true market leader in Las Vegas real estate. 2014 looks to be an incredible year for TR Realty.