Real Estate Market Trends 2017

It’s hard to believe we’re almost done with 2016 and about to start a whole new year with new possibilities for buying and selling homes. No doubt many factors will ultimately influence how 2017 shapes up for the real estate market, but there are a few trends being projected into this next year. If you are buying or are thinking about buying a home there are a few things to keep in mind as 2017 approaches.

Location is Everything

There is no such thing as one buying experience these days. Buyers and sellers have widely different experiences based on where they are selling or looking to buy. It’s impossible to say until you are in the process, but a few overall trends may help:

Home prices are expected to keep rising, but more slowly in 2017 as opposed to 2016 - 3.5% vs. 4.5% according to Moody’s Analytics projections. What you are selling - and where - and what you are buying will have a big influence on how it goes. Smaller homes have seen a sharp price growth as opposed to larger homes.

In addition, urban areas have appreciated faster than their outskirts. There is no indication this trend will not continue into 2017. As a result, if you are selling a condo in the city in order to move out of town, your equity may go farther than if you are doing the reverse. Inventory of smaller homes is low and competition is high. Be prepared to be patient.

Time to Get More Space Now

This should be great news for growing families looking to expand: the average price of a two-bedroom house rose 59% nationwide over the last five years as compared to the average price of a four-bedroom home, which only rose 41% over that same time period. At the higher end of the market there has been a rise in inventory by 8% for homes price $500,000 to $750,000.

If it’s time for you to gain some more space and you have the equity to do it, you’re in a great position to be selling your smaller home. You may even have the luxury to wait for a higher offer as opposed to a faster sell. The first part of 2017 is your best bet.

Flexibility

Flexibility is key for those looking to downsize or for first time home buyers. For smaller homes, the inventory is low and competition can be fierce. There are some tips that might help.

For one, if you are willing to move further away from the city, you can get more bang for your buck. Though the prices per square foot are rising, the price for homes in the city center has risen by 76%, as opposed to 53% for homes further out.

Another option is that good ol’ fixer-upper. So many buyers are hoping for a move-in ready home, but if you are willing to consider a home that needs even a few updates you will be in a much better position to snag the size you’re looking for.

More and more of the homes for sale need work. It might be a good idea to put a positive spin on it and consider that this way you get to be in charge of your own renovation.

If you’re moving between states, you may profit from the largest variation in metro area home prices that has existed in two decades. Retirees looking to buy a home down south could profit from considering cities slightly off the beaten path that offer just as much sunshine at a fraction of the cost. Charlotte, North Carolina, Greenville & Columbia, South Carolina, Oklahoma City and Tulsa, Oklahoma, Baton Rouge, Louisiana and Fayetteville, Arkansas are all considered some of the best most affordable cities in the U.S.

Great Interest Rates

In any case, if you’re in the market for a new home, now is the time to lock in the record low interest rates we’ve seen in 2016. They aren’t expected to last and could go up as much as half a percent in 2017. If you’re applying for a 30-year fixed loan on a $250,000 mortgage, you could end up paying $864 more in annual payments if the rates jump from 3.7% to 4.2%.

As always, if you want to get started now, please call our office. We’d be honored to help!

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