2017 Predictions For The Real Estate Market

Predictions for 2017 real estate

What will 2017 bring for the Phoenix real estate market?

Well here we are again, a brand new year. Time for fresh starts (yay!), resolutions (ugh!), and predictions for the new year (I nailed it last year!). Here are my 2017 predictions for the real estate market:

  1. National trends: Nationally the market will slow. Gains will still be made in home values but at a slower rate. Great news for places like San Francisco, Portland OR, and New York City where it’s become nearly impossible for middle class buyers to enter the housing market.
  2. The Arizona housing market: We will see the metro Phoenix housing market outpace the national outlook. Realtor.com places the Phoenix market as number one out of one hundred local metro forecasts (wahoo!). Our growing economy, sun-belt climate, and great housing affordability index leaves little to be desired in the Phoenix metro area. And when you look at who the buyers are going to be, it helps explain the growth in our market.
  3. Who will be buying? Millennials revving up their careers and Boomers retiring. Arizona is known for its great university system, both public and private. And with  great jobs coming in the fields of engineering, health care, high tech, manufacturing and education, we will see roots being planted and homes being bought by newly minted professionals. On the other side of the career development chain, what better place to retire to than the valley of the sun? Low cost housing and utilities, high golf course/retiree ratios, and an excellent health care system make the valley a great place for retirees to kick back or kick their heels up.
  4. Increases in interest rates: You don’t have to be a genius economist to predict that interest rates will rise in 2017. Rates have been at record lows for so long that the millennials who will be buying in 2017 would be shocked to know that the 30 year average for mortgage rates is well over 8%. Slight increases to the fed rate over the next 12 months will nudge mortgage rates higher. I will go out on a limb and predict that rates will not exceed 6% by years end. And as a person who remembers my parents selling their home in an 18% interest rate environment, that still sounds pretty darn good. However if you’re going to buy, now is the time to do it. A few months could mean quite a few dollars.
  5. Phoenix inventory will loosen: The daily lament for the typical real estate agent over the last two years has been “why aren’t more people selling?”. Buyers are equally disheartened, particularly under $300,000 at the lack of homes from which to choose. Whether it’s due to promised loosening or lending regulations or a pent up desire to sell, I believe that we will see inventory improving in all price ranges. At the lower price points, sellers may still have a slight advantage, but we will see more balance between $300,000 and $500,000.

Well, that’s it for my 2017 predictions for the real estate market. Be sure to check back in December to see how I did!

Speak Your Mind