One of the big news items in real estate this week was the prediction that 2016 is set to be the best year for home sales since 2006!
In a press release issued on Tuesday, realtor.com announced its Housing Forecast for next year, painting an extremely rosy picture for buyers and sellers.
The site expects total sales for existing and new homes will reach 6 million for the first time since before the years of deep recession.
The release stresses that next year will effectively see a return to "a normal, but healthy housing market". One of the key areas of growth is expected to be new housing, which has lagged in recent years as the economy has found its feet once more.
Predictably, the release states realtor.com's expectation that mortgage rates will rise - to an average 4.65% for a 30 year home loan by the end of next year. This, of course, will have a knock-on effect on affordability of homes but, as we have seen countless times in the past couple of years, forecasts of this nature have simply not materialized, or have fallen far short of increase estimates.
It's widely anticipated that the Federal Reserve will raise interest rates after its meeting in the middle of the week after next, but history demonstrates that mortgage rates don't always follow suit and have even lowered after such announcements. Indeed, after some steady rises in early November, rates have generally been on a downward trail for the past three weeks, so there are very mixed signs at the moment.
We've talked all year about the impact of older millenials (25-34 years olds) on this year's homes market. This trend is set to accelerate in 2016 with this group expected to comprise the largest demographic of home buyers, up from 30% of the strong current market. This is such great news for everyone in the house selling chain, as so many millenials will of course be first time buyers, facilitating transactions right through every price level and enabling more existing homeowners to upgrade. It's already a growing trend that has increasingly informed this year's impressively robust market right through to year end.
Young gen X'ers (35 to 44) are expected to make up the second largest population of buyers in 2016, having rebounded from financial crisis and now entering their prime family raising and earning years. More than two thirds of buyers in this age group already own a home so, again, we can see that this will create an even bigger buying pool and sentiment than we are already enjoying.
Retirees between 65 and 74 years old will again be a significant force, looking to downsize their current home and lower their living costs - yet further evidence of improved market fluidity and exciting options for buyers and sellers alike.
Perhaps the key point to stress is that none of these predictions are especially new and really represent an organic growth of trends we're already seeing in our local markets.
Why not contact us today to discuss your 2016 home buying or selling strategy. There's no time like the present.