Real Estate Marketing Forecast

This year is going to be a hot one - housing-wise. We’ve already had a streak of spring-like weather in many parts of Michigan. We hear the trend will continue. Another trend from 2016 is also going to continue and become more pronounced: the increase in home buyers. Like it or not, if you’re a millennial, you and many of your peers are going to be competing for the same homes.

Rising Rent

Rent costs are continuing to rise. Rising investment in real estate, rising home prices, tighter standards for landlords, higher taxes, and increasing insurance rates are some of the main reasons this is happening.

Landlords are paying more, and houses are becoming more valuable. We’re going to see that reflected in rental prices in most of the markets. Because of this, millennials who have been renting are at the tipping point. A mortgage payment for a modest home is now the same or cheaper than what they’ve been paying on rent.

Low Inventory

The low inventory trend is a growing one. Home sales were almost flat compared to last December, only increasing 0.5 percent. While inventory posted its largest year-over-year decline since April 2013, it has fallen 12.7 percent. That means that now is the time to list your home. There’s low seller competition. Homes are selling more quickly and more often at asking price. Plus, those buyers reluctant to purchase in December are starting to look again. A record sales month in November meant the inventory was at a low point. We should see a rise in inventory as the year progresses.

Home Prices

The national median home sale price rose 4.7 percent to $267,600 in December. This marks the kind of steady growth we’re going to see continue in 2017. Soon, we will see housing prices rise to near the pre-recession mark. For sellers, this may be the boon they’ve been waiting for. They could actually recoup any home value that was lost during the recession. If you are thinking about selling, make sure you work with an agent to accurately price your home based on the market.

While prices are rising, and that’s good for sellers, affordability is at its peak right now. It has been steadily around the 60-65% mark. It’s been predicted to drop slightly as 2017 continues but still remain at the top of the 50% mark. So, first-time home buyers, take note! You are certainly getting into a competitive market right now, but it’s never been a better time. If you’ve been thinking about looking, start sooner rather than later.

Mortgage Rates

Mortgage rates will probably rise slightly this year as well. They’re not predicted to rise over the 5% mark, but they will go higher than in 2016. Some experts believe they won’t rise quite as much as predicted, as 2016 rates were predicted to rise higher than they did.

Take Away

2017 is looking like a great year for buyers and sellers. If you’re going to sell, now’s the time to sell. If you’re going to buy, now’s the time to start looking! Mortgage rates, inventory, and home affordability are all at their most ideal. If you have any questions, give us a call. We’d be glad to help.