2017 Real Estate Home Sales Outlooks and Trends:
All real estate is local. What happens in one area may not necessarily happen in another area. Real estate is also hyper-local, there can be pockets of certain trends even within a city or tow which are unique.
This post is more in general terms. Seek the advice of your neighborhood real estate professional to verify and determine the marketing trends for 2017 as well as what happened in your area in 2016.
2017 is not projected to be any sort of robust year in real estate nationally.
There are several reasons for this:
- Consumer confidence in home ownership is down. It is especially down in western coastal areas for young people who don't feel they can afford to buy a home with the way the prices are increasing, and pricing them out of the housing market.
- Interest rates will also impact home sales because as interest rates rise, so do mortgage rates. The Federal Reserve did not want to do anything with the interest rates during an election year. They have been saying for some time that rates need to go up, but they kept them down, well, of course, until now.
Now that the election is over, they will adjust the rates handing over higher interest rates to the incoming President to deal with.
Higher mortgage rates will keep sellers from listing their homes for sale. In many cases, a homeowner puts up his or her home for sale to either scale down and buy another home or upscale into a bigger home. These two scenarios don't look good in the midst of higher interest rates.
The Federal Reserve is expected to rate the rates a few more times to 1.25 % which will create mortgage rates of around 4.6%.
Sellers will look at their current interest rates, especially those who have refinanced in the last few years.. and compare them to what their new rates will be.. and decide.. to stay instead of sell.
Rents and home prices are quickly outpacing incomes and that is never a good thing for home sales.
NAR chief economist, Lawrence Yun, is optimistic, however, remember, that is his job to be so. You don't want to let down about one million members and give them doom and gloom, rather build up their spirits and show the silver lining. That is his job.
Anyways, he says that the new economic stimulus from the incoming administration and job growth will encourage young people to buy homes.
But he also warns builders that these homes need to be affordable. Millennials are entering their prime home buying years. But they need homes they can afford to buy.
Renters who think it is a good time to buy have dropped. But rents are also going up.
It is most likely the best time to buy a home now instead of continuing renting. At least even with a slightly higher interest rate, the ownership of a home gives stability in knowing what your monthly payment is going to be every month and every year.
Some analysts say it is not going to be the rising home prices that will be a problem in 2017 but rather it will the the rising interest rates.
What have you noticed are the trends in your market?