Anyone who has worked in the real estate market for the past year has probably been cautiously optimistic going into this next year. 2016 was a big boom for almost everyone in real estate sales, for buyers, at least. The question is: are there any indicators out there that could project that this trend will continue, given outside factors like foreign investors and the new presidency? Let’s take a look.
Real Estate Prices
The real estate market has seen month after month increases of home prices, bringing them back to “normal” before the recession hit, according to all the top real estate analytics agencies. The middle of 2016 saw the national median real estate prices for home and condominiums reach over $225k. This was actually the 52nd month in a row of price increase, which continues into the new year. Will this trend continue?
Appreciation Values
Overall price increases are of course great news for the real estate market, but if we want to know whether this trend will follow for another 12 months, we’ll need to investigate further. Looking at the home appreciation values, we actually see a bit of a weakening for the upper-end of the housing market, like NYC and San Francisco, who are seeing a decrease of appreciation of around 5-10% each year since 2013. If you look at lower-end markets, like Denver, Oklahoma City, or Dallas, you’re seeing the opposite, where appreciation values have climbed 10-15% from the previous year.
What these two tales of home appreciation prices tell is that, yes, the market growth is stabilizing, but that doesn’t mean you won’t continue to see excellent sales opportunities in the real estate market for 2017.
Normalized Growth is Better
While those big price tags were surely a feast for the eyes for the past year, the normalization of the housing market is a welcome change for industry vets. Things get a bit more predictable and that means sales will become a bit more reliable. Fear of a potential volatile downswing is always something on the minds of real estate marketers, leaving them scrambling to adjust and recover. Now that we have a good set of indicators that tell us to expect a steady, yet more subdued growth, real estate jobs can take a little breather and work on optimization and focus on edging out their competition, for example.
As parting advice, we suggest playing things safe with the market for the next year, nothing is set in stone, so take advantage of this slowdown to prepare for any signs of road bumps, such as credit limitations or other affordability obstacles.
The mid-to-high priced real estate market for homes should expect to see more competition and higher prices, which isn’t really news to most, but it is one thing you can at least count on in the upcoming year.
“There’s a lot of demand right now for moderately priced houses that appeal to both first-time buyers and baby boomers who want to be in a right-sized house for aging in place. Across the country, most markets don’t have enough houses at or just below the median price in that market,”
