It is with great sadness and generosity that my annual rollout of US. Real Estate predictions can proceed forward. This year will have more a political bent given that 2016 was all about the politicos and the mental consternation it brought to the American psyche. Most many, real estate predictions are about hard numbers, sales expectations, parts, starts, etc., etc., etc. Pretty dry stuff if you & # 39; re a normal human being, but if you & # 39; re a policy wonk or a real estate broker, it 'sa nirvana jubilee. This year I will call my prescient forecast "Sidney' # Pix Six".
Millennials (Send in the Millennials)
According to Zillow magazine, "more millennials will become homeowners, driving up the homeownership rate." Millennials is also more racially diverse, so more homeowners will be people of color, reflecting the changing demographics of the United States. "Unless you" Similarly to the saying: Happy wife ... happy life. An active housing economy saying is as follows: Happy labor market ... happy America.
The addition to the 2017 National Housing Forecast is in lock step with Zillow, with its position that millennials and baby boomers are fully expected to majority of housing market participants in the coming year. The National Housing Forecast also noted "... that "in terms of the Mid-West, researchers believe they will lead the pack in at percent. "This year, average millennial market share in these markets is 42 percent, far higher than the US average of 38 percent.", Said the report.
New home growth connected to Obama job creation
There are varying opinion on that speculation, but here are some of the pros say. "Buyers of new homes will have to spend more as builders cover the cost of rising construction jobs, driven even higher in in 2017 by continued labor shortcomings, which could have been worsened by tougher immigration policies under President-elect Trump ", says Dr. Svenja Gudell, the chief economist at Zillow.," A shortage of construction workers as a result may force builders to pay higher wages, costs which are likely to get passed on to buyers in the form of higher new home prices.
Home Appreciation (The froth on the Top)
Even non-policy wonks like to sip the froth on the top. And real estate terminology, real estate home appreciation is the Eighth Wonder of the world. And according to Zillow, once again they & # 39; ve delivered that sediment in numeric value. S appreciation (remember, several years ago there 's was not), the bad news is that there' s a good news and bad news. it will be lower than than 2016.
"Home value will grow 3.6 percent in 2017, according to more than 100 economic and housing experts surveyed in the latest Zillow Home Price Expectations Survey. National home values had risen 4.8 percent so far in 2016.
--- Zillow.com
Some real estate experts refer to this as a Phase-two of the post-Recession The other 800 - pound gorilla expert in the room is Reator.com, which anticipates a 3.9 assessment rate, compared to Zillow & # 39; s 3.6.
Foreign buyers will play small role (No Visa, No Dinero)
Arguing with the world leaders seems to be the new norm, given the tit-for- tat with China, England and others. This word on the street is happy to be a bit more circumspect, since they will now have to consider their own visa and permanent Alien status given the President- elects status on immigration policies and visa reform. Translated: Hesitant foreign buyers will mean less buying on the home luxury market, a longtime favorite cash bucket for foreign nationals to invest their money in the states.
While Orange is the New Black, Small is the New Big (or vice versa)
That Texas A & M & # 39; s Real Estate Center notes there are serval reasons for this present and future shrinkage, which can be attributable to several factors: high demand for homes close to city centers, the Tiny Home movement (thanks HGTV), and the Come to Jesus Moment of home builders who now realize that poor home buyers can only afford so much square footage. The solution, build smaller homes.
Loan Democracy is Loan Democratization
I have advocated residential mortgage loans that are more user friendly. Incluase the FICO score requirement, According to the Mortgage Credit Availability Index, it & # 39; s easier to get a mortgage now than at any time in the past eight years.
"The pendulum has been swinging toward a loosing of the credit box a bit," Banks may also be more willing to work with borrowers over the next few years as they look for a decline in refinancing business when interest rates go up. says Daren Blomquist, a senior vice president with Attom Data Solutions. "I do not think we & ll see a reversal of that with the new administration. We & # 39;
--- The Fiscal Times, November 22, 2016
The newly elected president, and his administration have three major policies that are game changes.. Think the following: 1) Infrastructure spending, 2) Tax cuts, and 3) Changes to immigration policy. The cause and effect will directly effect new construction starts and mortgage rates.
So there you have it. One hates to be the bearer of bad (and good) news. May we have a propitious year and hope the real estate Gods are open minded to their favorite Son.
