As the New Year begins, I am starting to turn my attention to the incredible year it is shaping up to be in our local market area.
So, I thought I would share with you my predictions for the 2017 real estate market.
First, I believe that sales of existing-homes will increase locally this year. Nationwide, it looks like sales of existing-homes this year will reach the 6 to 6.5 million range, higher than the 5.8 million sold in 2016.
Second, I’m predicting that home prices will increase this year by about the 3.0 to 4.0% range in most of our local areas.
Third, mortgage rates are starting to increase and I see them rising to about the 4.5 to 5% range by the end of 2017.
Fourth, it looks like there will be a continued shortage of homes for sale in most of the areas of our region. This shortage of home inventory was one of the driving forces in our marketplace last year and it looks like it will continue this year.
Fifth, about half of all the homes sold this year will be bought by first time buyers. As interest rates rise, we will see more and more first time buyers jumping into the market before mortgage rates and home prices rise any further.
Sixth, millennials and boomers will continue to be the dominate players in our local market. Millennials are at the peak first time buyer age range now while many baby boomers are beginning to downsize or move to their retirement destination.
Seventh, it will be beneficial for sellers this year to get their homes on the market during the first quarter of the year, when inventory is at its lowest and before increasing mortgage rates begin to effect a buyer’s purchasing power.
Eighth, it will be beneficial for buyers this year to buy a home in the first quarter of the year before mortgage rates and home prices rise and impact their ability to purchase the home they want.
So these are my predictions for the real estate market in 2017. What are your thoughts about the real estate market for next year?
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