As we say goodbye to 2016, we head forth to 2017. While our crystal ball can’t predict everything in the future like who will win the super bowl or who Taylor Swift will date and write a song about, we can make some predictions about the real estate market.
- The top buyers will be millennials and baby boomers – As the latter groups of millennials are entering their 30’s, many of them want to settle down and buy houses. The deciding factor for that is there are more jobs being created for 25 to 34 year olds than any other age groups. Baby boomers, on the other hand where the oldest are in their late 60’s, are looking to move and buy as they get closer to retirement. While some boomers are looking to downsize, other boomers are looking to move in a bigger home to make room for children and grandchildren visitations. Also, many baby boomers are thinking outside the box when it comes to location. Many of them are looking to move closer to their family instead of popular retirement spots like Arizona and Florida.
- Home values will increase a bit slower than last year – By the end of 2016, home values rose to about 4.8%. The value in homes will continue to rise, but the estimated value is up 3.6%. The slowdown in appreciation, according to experts, is an inevitable effect of the market’s recovery, and signals that the nation’s housing market is normalizing.
- More affordability means moving to the suburbs – While home prices’ are continuing to rise, many buyers are saying goodbye to city life and hello to living in the suburbs where the affordable housing are. You can live in the city and be able to walk down the street for a gallon of milk or to grab other amenities, but with that comes a hefty price tag. For that reason, many are willing to commute outwards to be able to find homes in their price range.
- The price tag on new homes will continue to be expensive – As they say, you get what you pay for. If you want a brand new house with all the tech and updates for your home, it will cost you a bit. A labor shortage in the construction industry is forcing builders to offer higher wages and benefits to get more workers. However, the price inflect will also be passed onto the buyers.
- If you are looking to move out west, be prepared to pay for it – If you are looking to move from the east coast to the west coast, expect the prices to rise. With population growth on the west coast means more jobs for people. However when jobs continue to be created, the demand for homes will increase. And when you have a limited inventory, the prices for the homes will be higher.
- Smaller homes will be formed in a dense environment near public transportation – As we discussed earlier, one of the issues living in the city is the price tag. That can be an issue if you were the mayor in the city. What many of them are looking to do is build smaller homes that takes up less space and could fit more buildings. Also, by building near public transportation, if they choose to live outside the main center of the city, they will be able to have easy access to reach the heart of the city.
So we enter 2017 with high hope in the real estate market and wonder if our predictions will come true for sure or not. Here’s to a strong market and hope that when Star Wars episode 8 comes out in 2017, it will blow our socks off, despite our recent lost of Carrie Fisher aka Princess Lelia. May she rest in peace.