Real Estate Trends for 2017
Tracking real estate trends is the realtor’s secret weapon for strategizing their sales process. Knowing what to expect gives you the advantage of communicating more clearly what your buyers and sellers can expect in the upcoming season. Setting realistic goals can also help you budget and forecast what your potential earnings could be by the end of the year.
A great way to track the real estate market is by checking statistics from the past, and using those patterns to estimate emerging trends. Now that we are more than halfway through the year, let’s take a look at some of the 2017 real estate trends.
Where We Were: Beginning 2017
One trend many sellers may be happy to see is that 2017 has been the most profitable time to sell homes so far in 10 years. As most real estate agents know, 2006 – 2008 saw a significant dent in the housing market, which we have slowly been crawling out of for over eight years.
Although we still have a way to go to return to the original lucrative market of years past, we are getting there. In the first quarter of 2017, the average median home price was $225,000. This equates to a $44,000 increase from 2007 – the highest gain in a decade, and up 13% from just a year ago.
One of the 2017 real estate trends working in buyers favor are low interest rates. Although there was a slight increase after the 2016 election (which is common after an election year), the rates were still historically lower than normal, averaging at 3.85% in the beginning of the year.
The low interest rates are what made home buying attractive for a demographic that we did not expect to be buying homes so soon. Millennials started in on the real estate action in 2017, and soon became the majority. They now make up the largest amount of homebuyers, representing around 45% of all purchase loans as of January 2017.
The increase of millennials as homeowners is up 3% from the previous year. Experts believe that as millennials start entering their 30’s, the low interest rates of home buying becomes more attractive than renting. They began entering the market, and we don’t see that slowing down anytime soon.
Where We Are Going: Ending 2017
As we settle into the second half of 2017, we start to see that some of the real estate predictions aren’t going quite as forecasted. At some point this year, we expected the issue with a diminishing housing inventory to equalize for a more sustainable market. So far, that doesn’t seem to be the case, where we are still seeing more buyers than homes available.
The inequality of supply and demand is causing prices to continue rising. By June of 2017, the median home sold for $263,800 – already a significant increase from the beginning of the year. As the demand for housing continues to grow, prices should steadily increase. Great news for sellers, but it will put a strain on homebuyers.
There is one saving grace for the homebuyer – interest rates will continue to stay relatively low. Although the rates are forecasted to continue rising, it won’t be an amount that would heavily impact homebuyers. Experts predict we would end the year at a 4.1% interest rate for home loans.
As the interest remain low, more renters will begin entering the housing market. Financially, mortgage rates would need to double from the price they are now to become a more appealing option than buying. It is expected that millennials will continue flooding the housing market as buyers – maybe later in life than their parents, but at least with lower interest rates.
Other Real Estate Trends to Look Out For
The idea of the starter home is beginning to fizzle, as homeowners decide to keep their homes longer before selling. At the beginning of the year, homeowners were selling their houses after an average eight years of residence, almost doubling the average 4.46 years of tenure most homeowners gained between 2000 and 2007. This could be due to the housing bubble bursting when most homeowners decided to stay put as they waited for their equity to return while the housing market equalized.
Another interesting trend is the average time houses spend on the market. Due to the low inventory of housing and the high amount of buyers in the market, houses are moving fast. In the first quarter of 2017, houses stayed on the market for an average of 45 days, nearly half the amount from the same period in 2011.
It’s important to know who is buying and where, so continue tracking 2017 real estate trends to grow your business. In addition to establishing yourself as an expert in your field, knowing the trends will help you generate leads and show you which markets are the most profitable.