2017 is shaping up to be an interesting year in real estate. Lots of changes going on in our country including facing the Millennial Effect, interest rate questions and economic changes. Below are four promising trends that will shape the Springfield housing market in 2017.
Millennials rising from the basements
As millennials get older, they are increasing home ownership rates faster than in previous years, according to research from Fannie Mae. Millennials have now overtaken baby boomers as the largest generation in the U.S. Many of Millennials entered their post-college years during one of the toughest economic periods in decades. The running joke for years has been about the number of them living at home with their parents. In some cases this was true, but the economy has improved now and with jobs more abundant, millennials are coming to the real estate market in force.
First-time home buyers are a driving force for a healthy real estate market and millennials are starting to buy homes. They are starting to age into a group primed for home ownership and many of them are in better positions financially because of years of saving and living in “the basement.” This influx of new buyers and increased demand is likely to lead to a strong Springfield housing market in 2017 as they seek to take advantage of low interest rates.
Interest rates to rise
Will rates go up? This question will push many people into the buying decision. The reality is, this has been the same question at the end of each of the last three years, but eventually they have to go up…right? If you listen to the Fed, yes. They may rise, but the rise is likely to be gradual overall to keep the economy from hitting another recession. The fear of high rates will continue to create a sense of urgency as many people look for a better option. The low rates mean it is still cheaper to buy than rent in the Springfield real estate markets. The low rates also still make it a great time to buy, even in a sellers market.
To move or remodel, that is the question
For many years now, many homeowners were locked in at extremely low interest rates and uncertain futures. Many of these homeowners choose to remodel their existing homes instead of move. Now as the economy seems to have gotten its footing, people are starting to look at moving. This is giving home buyers more options to quality, move in ready homes. These homes are being purchased quickly in this sellers market. Many people are taking advantage of their increased equity and looking to buy their long-term dream home. Space and location are typically the deciding factors when considering a move. Curious what your home is worth? Click Here
The biggest increase in prices has primarily taken place in high demand “starter homes”. These homes are more easily financed for first-time or middle income buyers. Higher priced homes and luxury homes in Springfield have not experienced as large an increase in prices due to lower demand. This gives many homeowners the increased financial leverage to purchase their dream home with a larger down payment, low rates and a payment they are comfortable with.
“But I don’t want to be homeless”
The tight supply of homes in Springfield’s hot housing markets is making the stress of buying and selling higher than normal. The limited number of homes and a competitive environment means that many homeowners are afraid to sell for fear of having no home to buy. However for most that will not be an issue when moving up in home size. The smaller “starter homes” are moving fast but larger homes are not moving as fast still leaving good options in move up homes. This trend will likely keep inventories low for “starter homes” and continue to push prices higher eventually pushing up pricing for larger homes. Start looking for your dream home today. Click Here
There are so many factors—nationally and locally—that can affect the real estate market. I look at all factors for Springfield’s real estate market and larger trends. This is to give you the best information so you can make an educated decision. If you are thinking of buying or selling a home call or email me for the most up to date information. 417-693-3254 or Brice@BriceDavis.com