After a busy year that saw residential real estate values rise steadily and a flurry of activity, what can we expect from 2017?
Several trends can help us discern the future.
Residential real estate had a great run in 2016
Next year promises more of the same, driven by several key trends
Understanding those trends can be key to success in the new year
Continued Strength in Home Values
Despite a contentious presidential election and the ever-present potential for interest rate changes, experts remain bullish on home values and the housing market in general. Rates may continue to rise, but changes will likely be slow and deliberate and the likelihood of rates having a dramatic impact on supply and demand seem remote for at least the first half of the year.
The housing market is likely set to continue a bull run with many longtime residents taking the opportunity to right-size their homes. This means down-sizers and move-up buyers should continue to drive trends that still point up.
Increased Mortgage Flexibility & Easy Credit
According to the mortgage credit availability index, the availability of credit is near highs for the past decade. This will offer flexibility that can fuel the market well into 2017. Additionally, lenders are offering more flexible options to consumers in both terms and down payments, further driving many to consider a new home.
Housing Shortages to Continue, but be Limited in Scope
Much like we’ve seen the past year, it appears 2017 is headed for more demand than supply at certain price points. Home supply is set to continue to be scarce in the midrange ($250k - $500k) but robust both above and below.
Homes are still available in the midrange zone and the market is active, but in the near term demand may continue to outstrip supply for move-up homes.
Generational Factors Make 2017 the Year Act
Millenials who are now set in careers and looking to purchase will continue to drive demand. Similarly baby boomers moving on and looking to downsize or rightsize are offering supply.
These generational factors will make selling an entry-level home or buying and renovating a dated home an easier play than in past years. It is not surprising given this backdrop that house flipping has returned. This presents interesting opportunities for sellers and a few potential challenges for buyers.
Technology will Drive Buying and Selling
Customized searches and the free-flow of information will continue to shorten the sales cycle for desirable homes that are priced appropriately. This means that buyers must be ready to respond quickly when homes that fit their needs are listed. Pre-approvals for credit along with an existing relationship with a real estate professional can prove invaluable in such a market.
For sellers, the tech trend means that online home profiles, compelling photography, social media marketing and staging are more important than ever. The window for capturing attention and garnering a sale is shrinking. This makes better preparation and proper pricing crucial.
The Bottom Line
At Zachary Adams and Associates we are looking forward to a busy but productive 2017 delivering everything you need to sell or purchase a home. We are adept at social media marketing, veterans of developing custom searches and well-versed in the changing dynamics of residential real estate.
If you are considering a move, now is the time to begin preparations to capitalize in the coming year and we’d love to be a resource to help. Contact us today to get started.