2017 will be a good year for sellers – and other trends to look out for
Each year, the housing marketing shifts in the favor of either homebuyers or homesellers. Since the housing and financial crash of 2007-2008, it can be hard to predict how the housing market will go year to year. In fact, experts considered 2016 a mixed bag in real estate, with Paul Estajian from FortuneBuilders.com writing,
“A shortage of inventory sparked a buying frenzy for the better part of the year, as high demand coupled with low interest rates fueled an onslaught of activity in the housing market. In response, home sales and home prices have flourished ... On the other hand, the low number of available homes for sale — which coincidentally helped drive the overall median home price up — also pushed home affordability down in the same year.”
This year, in one of the first years since the financial and housing crash, people are predicting that 2017 will be the year for sellers. Amber Taufen from Inman.com writes,
“[2017] will likely remain a seller’s market … New construction will pick up steam ... Sellers will likely find that it will take a little longer to sell, but demand will still outstrip supply on the back of a job market that continues to tighten.”
While it is still early in the year and there is still some uncertainty, most experts say the housing market is expected to lean in favor of sellers this year, though it may become a buyer’s market again in the next year or two. Perhaps the biggest reason for this is that home prices and interest rates have been rising steadily since last fall. While rising home prices is great news for anyone looking to sell their home and make profit off of it, rising rates can make anyone hoping to buy a new home nervous. Wendy Connick from The Motley Fool writes,
“The climb in prices and interest rates seems to have many homebuyers thinking, ‘Grab it now before it gets even more expensive!’ … The high level of competition will inevitably make it even harder to buy a house."
Mortgage rates have also been shown to be rising after the real estate market showed off the lowest rates in recent history last year. According to Estajian,
“Since the November 8th election, mortgage rates have increased more than half a percentage point, moving from 3.54 percent to 4.13 percent, as recently as December 8th. The increase in mortgage rates isn’t expected to stop there. Many experts anticipate a gradual uptick in borrowing costs to occur in 2017 and 2018, with rates going as high as 4.5 percent by the end of the year.”
While this could mean that home purchasing may lower this year, it could boost it in the upcoming years.
After 2016 ended strongly in real estate, this momentum is expected to result in homes selling faster in 2017. According to Nela Richardson at Redfin,
“[In 2016] the typical home stayed on the market just 52 days, the shortest time recorded since Redfin began keeping track in 2009. Though buying a home generally takes longer than selling one, the trend is getting faster. Redfin buyers spent an average of 83 days searching for a home, seven days fewer than the same time last year.”
This means that the buying trend is getting faster, and that there will probably be more home sales than in recent years due to how quickly homes now sell.
While 2017 may look like a seller’s market, don’t count out buyers to lay low this year. Many experts predict that millennials, a generation old enough to remember the housing crash and feared that they would probably never own a home, will finally become first-time homebuyers and renters. Estajian says,
“Although millennials represented 35 percent of homebuyers in 2015, up from 32 percent in 2014, Realtor.com predicts millennial homebuyers will make up a much larger portion of home buying activity next year … 2017 is expected to experience a wave of millennial homebuyers and the increase of first-time buyers in the market will drive competition to be even fiercer next year for affordable starter homes in the suburbs.”
Overall, with rising prices, high demand and rapid selling rate, 2017 is gearing to be a good year for home sellers. While that doesn’t make it impossible to buy a home, it does mean that potential home buyers should take their time, stay on the lookout for good deals, and get a mortgage pre-approval before beginning their search.
Work Cited
Connick, Wendy. “Why Housing in 2017 Will Be a Seller's Market.” The Motley Fool. 21 February 2017. https://www.fool.com/mortgages/2017/02/21/why-housing-in-2017-will-be-a-sellers-market.aspx. Accessed 14 March 2017.
Estajian, Paul. “Real Estate Market Trends: Will 2017 Benefit Buyers, Sellers Or Both?” FortuneBuilders.com. 14 December 2016. http://www.fortunebuilders.com/real-estate-market-trends-2017. Accessed 14 March 2017.
Richardson, Nela. “Redfin’s Seven Housing Predictions for 2017.” Redfin.com. 13 December 2016. https://www.redfin.com/blog/2016/12/redfins-seven-housing-predictions-for-2017.html. Accessed 14 March 2017.
Taufen, Amber. “Will 2017 be a buyer’s market or a seller’s market?” Inman.com. 13 December 2016. http://www.inman.com/2016/12/13/will-2017-be-a-buyers-market-or-a-sellers-market. Accessed 14 March 2017.