A recent press release issued by realtor.com points to a fantastic year ahead for home buyers and sellers.
In its Housing Forecast for next year, realtor.com predicts that total sales for existing and new homes are expected to top 6 million for the first time since 2006.
This means that next year will see a return to what the popular site calls: "a normal, but healthy housing market".
The release unsurprisingly states that mortgage rates will gradually rise - to an anticipated average 4.65% for a 30 year home loan by the conclusion of 2016. This naturally will have implications on the affordability of homes but, as we have seen countless times in the past couple of years, forecasts of this nature have simply not happened. It's also worth remembering that a more robust economy and improved buyer confidence will act as a balancing factor if rates do begin to climb.
Following upbeat labor market data at the end of last week, it's now generally accepted (though by no means guaranteed) that the Federal Reserve will raise interest rates after its meeting on Wednesday 16th December. History, however, demonstrates that mortgage rates don't always rise as a direct result and have even fallen further after such announcements in the past. Despite a small but steady rate increase in early November, rates have been on a downward trail for the past three weeks.
The return of older millennials (25-34 year olds) to more active home purchase has been one of the key characteristics of the 2015 real estate market. This very welcome trend is expected to accelerate in 2016 with this pivotal group comprising the largest demographic of home buyers, up from 30% of the strong current market. Excellent news for everyone in the house selling chain, as so many millennials will of course be first time buyers, facilitating transactions through every price level and allowing more existing homeowners to move upscale. It's already a growing trend that has helped to drive this year's impressively robust market conditions right through to the end.
Young gen X'ers (35 to 44) should 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, this will create an even bigger buying pool and better sentiment.
Retirees between 65 and 74 years old will again be an important influence, with many looking to downsize their current home and reduce living costs - more signs of improved market fluidity and exciting options for buyers and sellers alike.
As if all this wasn't cause enough to celebrate, we have seen the biggest price gains here in the West during this year, with San Francisco-Oakland-Hayward actually taking the top spot in the nation for annual price gains. Nine out of ten of the biggest annual gaining markets are located in the West!
Mix in our unique local dynamics of a real estate market powerfully driven by the increasing success of the tech sector and it's a rich recipe for a year to remember.
Call us today for professional assistance in planning
your 2016 home buying or selling strategy. It's going to be too big an
opportunity to miss!