2016 is right around the corner. The new year is coming and with that, economists and realtors are looking at upcoming real estate trends. 2015 was the best year of real estate since the recession. Now, the economy is strong. Employment is improving every day. Demand for homes is up. So, what will 2016 bring us? Jonathan Smoke, chief economist at realtor.com, recently listed some important trends coming in real estate in 2016.
The Upcoming Real Estate Trends
- Real estate will return to “normal” growth.
According to Smoke, home sales and prices are going to grow in 2015. However, 2015 saw very quick spikes in growth. 2016 will see slower growth, but that is a good thing. After living through the effects of a housing burst and recession, tons of foreclosures and distress sales, things will be more normal and stable in 2016. Construction trends will be steady. Prices will rise at normal rates, reflective of a healthy market.
2. 2016 might be the best year to sell, thanks to generational shuffle.
Millennials will continue to be big buyers next year. In 2015, they represented almost one third of all home sales. To help them will be recovering Gen X’ers ready to upgrade and Baby Boomers who are moving into retirement. Boomers will play a double role in boosting our 2016 market because they will probably sell homes and then buy new ones.
3. More affordable building
Builders in 2015 constructed a lot of higher-end luxury buildings. In 2016, we should see more affordable new homes because more available credit means the first-time buyer segment is attractive to builders.
4. Effects of higher mortgage rates
According to Smoke, the move by the Fed that raised interest rates will mostly effect higher-priced markets. However, he believes many Americans will be spurred to sell their homes before rates go even higher, and that will mean overall minimal negative effects by the raise.
5. Rent prices will go up
Rents are accelerating even more quickly than home prices. In many parts of the US, it is and will continue to be more affordable to buy than sell a home. Hopefully, we will also see more construction of affordable rental housing.
It looks like upcoming real estate trends are very positive! We at RE/MAX Paradise are excited for a bright 2016, and we always welcome you to contact us today for any real estate inquiries.