10 Real Estate Trends to Watch in 2017

real estateBy Beth Braverman

November22, 2016

Nearly a decade after the real estate crisis set off wild swings in the housing market, most markets finally stabilized last year. The election of Donald Trump has brought uncertainty into the industry, however. While the President-elect built his empire on real estate, he has said relatively little about what policy changes he might make regarding housing.  That’s not too unusual, since when the housing market is doing well it is generally not a campaign issue.

Here’s what the experts we spoke with expect to see in 2017:

1. Rising prices will keep pushing up homeowners’ net worth.
After a 6.3 percent increase over the past year, home prices are poised to rise another 5.2 percent through September 2017, according to a recent report from CoreLogic. Rising prices have doubled the amount of home equity held by Americans with the average homeowner gaining more than $11,000 in home-equity wealth last year alone. If home prices continue to increase as projected, Americans would add $1 trillion in home equity to their collective balance sheets next year.

2. But mortgage rates are going up.
Rates for conventional loans shot up nearly a quarter of a percentage point in the days following the election, the fastest increase since the ‘taper tantrum’ of 2013. That could be just the beginning; the Fed is expected to continue raising rates on a strong economy, and even before Trump’s election, the Mortgage Bankers Association was predicting that rates would reach 4.8 percent (an increase of nearly two percentage points) by the end of 2017. 

That means that borrowers who are looking to re-fi should do so earlier in the year, and buyers should consider locking in their rates during the closing process. While some worry that rising rates could dampen the housing market, job security and wage growth are larger factors on home activity than interest rates.

3. It’s getting easier to get a mortgage.
It’s easier to get a mortgage now than at any time in the past eight years, according to the Mortgage Credit Availability Index. That reflects an increased availability of both jumbo loans and low down-payment loans. Banks may also be more willing to work with borrowers over the next few years as they look to make up for a decline in refinancing business when interest rates go up. “The pendulum has been swinging toward a loosening of the credit box a bit,” says Daren Blomquist, a senior vice president with Attom Data Solutions. “I don’t think we’ll see a reversal of that with the new administration. We’ll likely see an acceleration.”

4. Rents will continue to level off.
While rents in most large metro areas will continue to increase next year, they’ll grow at just 1.7 percent next year, following a similar growth this year, according to Zillow’s rent forecast. The modest gains follow years of double-digit growths in many places and reflect inventory finally catching up with demand as builders create new apartment buildings to accommodate the nearly 40 percent of Americans who are choosing to rent rather than buy housing.

5. The share of cash buyers will move closer to normal.
All-cash buyers fell below 30 percent of home sales this year for the first time since 2007, and they’re projected to decline for the next two years until they get back to their historical average of about 25 percent, according to CoreLogic. That’s good news for some homebuyers who have struggled in recent years to compete with all-cash buyers in bidding wars.

6. New homes are getting smaller.
The median square footage for new homes this year fell for the first time since the recession. Smaller homes are the product of several trends driving the real estate market, including higher demand for homes close to city centers where space is tight, and continued growth in the “tiny home” movement.

The shift also reflects a renewed focus by builders on the neglected market of entry-level buyers. “They’re building smaller homes because people can’t afford to buy the larger homes anymore,” Chief Economist at Texas A & M’s Real Estate Center.

7. Inventory will remain tight.
While builders have increased production, they’re still only putting homes up at about 60 percent of the normal pace. Total housing inventory at the end of September increased 1.5 percent to 2.04 million existing homes for sale, but that’s still 7 percent lower than last year. Unsold inventory in September was at a 4.5 percent-month supply, down from 4.6 percent the previous month. (A six-month supply is considered a healthy market.)

That continued lack of inventory is one of the main factors behind rising prices. “It’s driven by supply and demand,” says Sam Khater, deputy chief economist at CoreLogic. “The lack of affordable supply is really driving up home prices.”

8. Foreign buyers will play a smaller role.
Foreign buyers, who have helped fuel the luxury real estate market in recent years, backed off a bit this year amid rising prices and an appreciated dollar and increased scrutiny from the Treasury Department. That trend may accelerate as foreign investors weigh the impact of a Trump presidency on their purchase.

9. It’s getting easier for first-time buyers. After years of shutting them out, the market has become slightly more welcoming to first-time buyers. “On the supply side, builders are finding business models to provide the level of product, such as townhouses, that first-time buyers are looking for,” says Robert Dietz, chief economist with the National Association of Home Builders. “And on the demand side, wage gains and the demographics of today’s millennials who are marrying and having kids later, will help.” 

Millennials are more secure in their jobs, so they’re better qualified for mortgages, particularly the low down payment options.  While inventory is still tight, many institutional investors have left the market, which makes it easier for first-time home buyers to compete for entry-level properties.

Visit www.thefiscaltimes.com for more stories.

Visit www.boldmovesrealestate.com for a great team of local realtors who will help you navigate the 2017 real estate market.

This blog was posted on www.boldmovesrealestate.com on December 28, 2016.

 

Merry Christmas from BOLD Moves Real Estate

Christmas

BOLD Moves Real Estate would like to wish all our families, friends, and clients a wondrous and joyful Christmas and an inspiring New Year.  At this time of year, our BOLDIES team would like to thank all our clients for the pleasure of working with them during one of the most important times in their lives.  We know buying and selling a home is one of the most important and emotional decisions in anyone’s life.   We know that there are many choices out there and we thank you for choosing to work with BOLD Moves Real Estate.  We genuinely want to help our clients move into the home of their dreams or sell their home and move on.

A new year is a clean slate and the possibilities are endless.  Dream big and make 2017 the best year it can possibly be.

Visit www.boldmovesrealestate.com to meet our team of BOLDIES and see how they can make your 2017 shine.

This blog was posted on www.boldmovesrealestate.com on December 23, 2016.

Buying a Home at the Holidays

 

Top 5 Reasons To Buy A Home During The Holidays

Why it Makes Sense to Buy a Home at Year’s End

Top 5 Reasons To Buy A Home During The Holidays

November 30, 2016 Few people like to uproot their family and go through the stresses of home buying and moving during the holidays, but for those who do not mind, the holiday season may provide home buying bargains. Here are a few of the reasons why.

    • Less Market Activity – Lots of family, school, and work activities, combined with the weather in many locations, lead to fewer real estate transactions over the holidays. Since fewer people overall are looking to buy houses, you will have less competition for your preferred house – and this gives you leverage.Holiday home sellers often have to adjust their price downward or make other concessions if they want to sell. Keep this in mind as you search for homes. Bargains may be available, and listed prices may be more open to negotiation.
  • Motivated Sellers – People who are selling their homes over the holidays often have great incentive to sell, such as an upcoming job relocation. If a house has already been on the market for some time, that incentive is multiplied.You may be able to use this urgency to your advantage (assuming you are not in a similarly urgent need to buy). Negotiate fairly but firmly with sellers and you should be able to extract a lower price and/or other concessions like paying part of the closing costs.

Potential Tax Advantages – If you itemize your taxes, you can deduct any points you paid upon closing, as well as property taxes and mortgage interest. Whether it is to your advantage to buy before or after year’s end depends on factors such as how many other deductions you have this year and expect to have next year.

It is best to consult with a tax professional before purchase. Even though you do not want to make a decision on a home purchase strictly for tax reasons, it could be to your benefit to close before the end of the year.

 

    • Better Interest Rates – Within the general trend of interest rates, there is often a cyclical trend of lower interest rates during the holidays – not from the generosity of lenders but due to limited demand forcing greater competition among lenders.There are plenty of factors that can obscure or swamp this cycle, but in general, you should see preferable interest rates around the holidays compared to the times immediately before or after.

 

  • Faster Closings – Generally, all parties involved have incentive to complete transactions toward the end of the year. Lenders want to close their books, real estate agents want to receive their commissions before the year closes, sellers want to move on to their new home and settle in for the holidays – and just like the sellers, you want to settle in as well.Since all parties are motivated and there are fewer transactions taking place during this time, it should be easier to put everything in place for a smooth and rapid closing.

These factors do not always apply. For example, if you are trying to buy a home in a winter ski resort area or similar high-demand winter destination, these dynamics may be reversed – except for the tax implications. However, for the majority of Americans, the holidays represent an opportunity to buy a home under mostly favorable economic conditions.

The weather may still be frightful, but your opportunities to buy a home around the holidays may be just as delightful. Enjoy the holiday season as you explore your options. Don’t forget to give Santa your new forwarding address!

www.moneytips.com

 

Photo ©iStockphoto.com/vgajic

Visit www.agentrising.com for Agent Rising Real Estate School and see how you can begin your real estate career.

Visit www.boldmovesrealestate.com for a great team of realtors to help you with all your real estate needs.

This blog was posted on www.agentrising.com on December 15, 2016.