One defining characteristic of 2015 has been the exceptional buyer sentiment that has informed the real estate market right until the very end of the year.
Almost exactly 365 days ago, we were predicting that the first time buyer would make a very welcome comeback during this year, and so it has proved.
By May, first time purchases were accounting for 32% of all buying activity.
By mid-year, we were reflecting on a great start to the year that had seen first mortgages up by no less than 80% in the first quarter of the year, compared with the same time period in 2014.
The significance of this rookie buyer renaissance simply cannot be overstated. To have genuine and thorough fluency, the housing purchase chain absolutely requires a very active entry-level market, as this stimulates sales right up to the highest price levels. Without a good pool of first time buyers, many sellers find it extremely difficult to move upscale.
There were so many reasons for this comeback, not seen since before the dark years of recession. Leading the way, yet again, were low mortgage rates, aided by the government's introduction last December of low down payment mortgages. The economy has gone from strength to strength this year and better job prospects and stability have also done much to fuel much higher levels of sentiment for all buyers.
Let's also not forget a subject that we've returned to again and again in the past 12 months - the rising cost of rentals. These are expected to increase above the rate of inflation next year and experts are predicting more and more people will pay over 50% of household income in rent in the years to come. Little wonder, then, that we have seen such enthusiasm for sufficiently qualified borrowers to move into a home of their own, effectively locking in their house payment for the life of the mortgage. What better incentive to buy is there than that!
While we've seen steady price increases this year, which are expected to continue in 2016, we aren't seeing hyper inflation and asking prices are therefore still quite sensible and well tuned to what potential buyers might reasonably be able to afford.
There is no reason to suspect that the current very bright situation will not progressively develop. Realtor.com predicts the best year in real estate since 2006 and, even though interest rates rose last week, this reflects very positively on the confidence that things will continue to improve as we move forward. Millennials are expected to account for the highest percentage of home sales next year - a great sign that first time buyers will be out in even greater force!
Why not contact us today and discover even more reasons why it has rarely, if ever, been a better time to buy or sell.