2016: What Lies Ahead
By: Michael Ardolino, Broker-Owner, Realty Connect USA
2015 was the best year for real estate since 2007. Locally, we saw home price appreciation and extremely healthy sales volume. The Fed finally settled the question of rising interest rates. Where do we stand as 2016 begins?
● Freddie Mac predicts that “years of pent-up demand and a strengthening labor market will likely allow housing markets to continue their momentum from this past year into the next two years.”
● As economist David M. Blitzer of Standard & Poor’s notes, “Generally good economic conditions continue to support gains in home prices.” Real estate is by far the best way to build wealth over the long term.
● The Fed has mapped out its intentions, and three rate hikes are expected in 2016. By the fourth quarter, Freddie Mac expects a 30-year rate of 4.6%, the Mortgage Bankers Association sees 4.8%, and NAR predicts 4.9%. Sales activity should remain brisk.
● The nation’s 87 million millennials (those born 1980-1995) are a market force to be reckoned with. A recent NA study found that individuals aged 25-34 make up the largest share of homebuyers, at 28%. As younger people enter the market and others move up, a healthy real estate cycle is established.
I view 2015 as the perfect springboard for 2016. It should be a very exciting year.
Look for our next market update in early February. It will provide local year-end stats for 2015 and our local outlook for 2016.
I’m always happy to share helpful real estate information, by publishing educational newsletters, speaking at real estate forums, and arming people with all the data they need to make confident, informed real estate decisions.