As we transition into 2017, you’re probably thinking like I am…. ‘2016 was a wild ride, what does 2017 hold in store?’ Considering the real estate market in Salt Lake and surrounding areas in 2016, not many predicted the continued low inventory through the year as well as the median price to shoot above the 2007 high mark. But we’ve already begun seen a shift in the market that could spell the change most have been expecting.
Since November, interest rates have crept up above 4% which could indicate an increase in market volatility but also it could create a rush of buyers trying to purchase before rates rise any more. More millennials are expected to enter the market as well as a rise in ‘boomerang buyers’ (former owners who lost their home to foreclosure or short sale during the Great Recession and now qualify to purchase again). Before the end of last year there was the highest share of first time home buyers in the market than any year except 2013.
So what does this mean for 2017? Men and women much smarter than I (hard to believe, I know) are predicting an overall price increase in the market of roughy 7% and a home sale increase of 5%. Economists at the National Association of Realtors forecast that housing inventory will continue to stay low which means our fast moving market will persist. Interest rates are expected to rise to 4.5%. Baby boomers and millenials will continue to dominate the market. Millenials are expected to make up 33% of the buyer pool and baby boomers 30%.
So in conclusion, the takeaway from the forecasters is this, rising interest rates, low housing inventory, increase in number of homes sold, but slower appreciation.
Should be an interesting year.
Stats and taken from the Salt Lake Board of Realtors Magazine