The Direction of the Housing Market for 2016
Ever since the housing bubble burst in 2008, the real estate market continues to have economists and leading experts monitoring every aspect of the industry. If you’re in this game, too, and want to know where the real estate market is headed for the rest of 2016, you’re in luck. The real estate market may become the little darling of the 2016 economic picture. Even though the GDP picture for the country is starting to look more positive as 2016 moves into the second half, economists are still worried about stagnant wage growth. However, it doesn’t seem to be affecting the real estate market according to Freddie Mac. Since positive job growth was slow coming back to the U.S., it’s presumed wages will be slow growing too.
As for the real estate market, low-interest rates are to blame for this bright spot and positive outlook. The last time rates were this low was back in 2013, but job growth was much more stagnant then. In fact, it was cited as one of the worst on record according to economists. Today, 2016 is much different. Interest rates are low and people are going back to work, along with low fuel prices. So, what does this mean for buyers and sellers?
From a seller’s perspective, home prices have increased. Since inventory is low throughout the country—and particularly in Southern California, home prices have grown. Freddie Mac estimates that average home prices will rise by 4.8 and 3.5 percent by the end of 2016 and throughout the first half of 2017.
As for buyers, these potential homeowners can find themselves taking advantage of historic low rates. With 30-year fixed mortgages hovering around 3.25 to 3.5 percent, more people are finally able to take that leap towards homeownership. Plus, most experts agree that first-time homeowners are entering the market. According to the National Association of Home Builders, multifamily residential construction spending has grown considerably from last year. Construction spending for single-family homes grew by 2.4 percent while multifamily home spending increased by 34.6 percent. Indicating that the majority of the real estate market growth is coming from first-time home buyers.
Overall, 2016 looks as if the real estate market will end on a bright note. With sellers finding more value in their current homes, and new homeowners entering the market, it continues to look like a win-win situation.
If you found this blog helpful, you might also want to read “Is a Housing Bubble Forming? Experts Say No!”
Thinking of buying or selling a home in the La Jolla area? As consistent top producers in real estate, Linda Daniels and The Daniels Group are your La Jolla housing specialists. Working with The Daniels Group will give you with the advantage of having local experts to ensure that you have a successful real estate transaction. From buying, selling and investing to financing options and more, we have the expertise and resources to help you achieve your goals. Call us today at (858) 361-5561 or email us anytime by clicking here.