People interested in buying real estate are likely to feel a little uneasy when a new year comes. Can’t really blame them. Interest rates may be trending upwards. There may be shortages of inventory in the areas where they wish to relocate, causing prices to rise. Or perhaps they have already been in a seller’s market and don’t know if they are going to be buying at the top. No one can be a perfect fortune-teller, but what to the experts say about 2016? Let’s see what David Charron, president and chief executive of Rockville, MD-based multiple-listing service MRIS, says about the coming year.
According to David, 2016 will be a much better year for real estate. There were rough patches but nothing too difficult to topple the industry. Mortgages will be much easier to get for home buyers while new homes enter the market on a daily basis. We also have to acknowledge the many programs that actually make first time home buying easier.
Year after year, people have been on the lookout for rising interest rates. This is mostly because interest rates have been very low the past few years. it would be only logical to expect an increase anytime soon. At the last Federal Reserve meeting, in fact, long term Treasury interest rates were raised a small amount. This usually has repercussions for the mortgage interest rate market. Most experts agree we shouldn’t expect interest rates to go down again anytime soon.
However experts tend to agree that a rise in interest rates will be incremental so it won’t really impact the real estate market that much. The only problem David sees is that this change in interest rates will affect a few home buyers looking for a mortgage. Why is this? Some people who are marginally qualified to buy at a lower rate may no longer qualify even if the rate increases only slightly.
Following the expected rise in interest rates, the selling season might start earlier than usual, mostly due to buyers rushing in before interest rates go even higher. Many buyers look at new homes early in the first quarter of the year to gauge their ability to buy at current prices.
A mild or very stormy winter can make the selling season much earlier or later. People who have had bad winter weather to deal with may delay their move, while those who have had a mild winter may be more interested in looking for real estate as early as February or March.
The one thing that has limited the housing market all these years has been the inventory of new homes available for sale. Luckily, it seems that this won’t be quite as much of a problem for the coming year. Little by little, various locations have seen an increase in the number of houses for sale each month compared to the previous years as new home builders start to get their inventory on to the market. It is also worth noting that there is much current activity in construction of new homes. This in turn will provide new listings for the market in the later months of 2016.
While it may not be that prominent, in most areas, one can expect a steady increase or flattening out of prices for the new year. A comfortable market is one where there are not sharp price increases, but rather slow and steady ones.