Real estate prices are finally on the upswing. This is good news for sellers. Rising prices are not necessarily a bad thing for buyers either since there are more houses on the market. This provides sellers some incentive to negotiate and buyers more houses to choose from.
At the end of 2015, many experts in real estate thought the Federal Reserve would raise interest rates. That did not happen until January 2016 and then the Fed only raise it .25 of a point. This has not seemed to deter buyers and in fact, more and more real estate markets are starting to grow again.
The possible impact of this small percentage increase is to temper the growth of home prices. This is good news for those in the market for a new home. Even with this small increase in the interest rate, there are still many bargains to be found and owning is still less expensive than renting.
Besides the interest rates and their impact on the housing market, several other real estate trends may emerge for 2016.
1. Coastal markets are slowing. Both of the U.S. coasts have enjoyed strong housing sales during the last several years, but these markets are indicating the possibility that these markets may be cooling off. This is especially true in the metropolitan areas in California, such as San Francisco and Southern California. Additionally, the Northeast is also expected to slow and prices may fall.
2. As the West Coast and the Northeast experience a slowing of their housing market, the Southwest corner areas may begin to boom in 2016. Areas such as Scottsdale, Arizona and Denver, Colorado are starting to see an upward swing in housing prices. One of the factors impacting this price growth may be more people heading Southwest from the Midwest. Baby boomers and even younger folks are heading Southwest.
3. As metropolitan areas experience a growth in housing prices, many people are getting priced out of the cities. As a result, they are looking for real estate in the suburbs but expecting the same amenities as they are used to in the city. They are searching for areas in the suburbs which are rich with amenities such as easy access to dry cleaners, grocery stores, and transportation.
One factor which is growing in popularity is walkability. Many buyers are choosing to live in areas where their home is close to shopping, schools, and recreation.
4. Since the housing bubble burst, many younger people were left behind and not able to buy their dream home. Now that the economy is growing again, these buyers are back. They are typically older first-time buyers than in the past but are looking to enter the market in 2016. Many of these buyers are Generation X and Millenials. Additionally, baby boomers will continue to downsize, buying smaller homes with more conveniences and selling their larger family homes.
Real estate trends for 2016 are looking up with more housing inventory available and increasing home prices. Even as the coastal areas slow a bit, the cities in the Southwest may pick up the slack. With increasing home prices, one can also expect to see cash out refinances occurring again. Hard money lenders in Phoenix can help you with funding such projects.