The year 2016 proved to be a hot one for real estate.
- Home values, prices and sales showed some of their strongest numbers since before the economic downturn a few years ago.
- And mortgage rates were downright cheap.
- But there’s no guarantee favorable conditions for buying and borrowing will continue in the months ahead.
Consequently, it’s fair to ask the question: Will housing prices keep climbing into 2017?
Industry experts weigh in. Though no one can tell the future, however here is advice from leading experts.
“The strong national sales price numbers mask a shift in the market where we are seeing home price appreciation weaken in some previously high-flying and high-priced markets while continuing to strengthen in some of the secondary markets,” says Blomquist.
Case in point: In July, home price appreciation in San Jose and San Francisco was each 5%, the former down from 16% a year earlier. San Francisco was down from a high of a 32% rate of appreciation in July 2013.
Nela Richardson, chief economist for Redfin, agrees that bullish real estate sales prices are decelerating. “After several years of steady and steep price growth, we are seeing indications that price growth is slowing and the market is normalizing,” says Richardson. “Redfin housing market data indicate that home prices in August rose just 4.4% compared to 2015 — the slowest pace of the year.”
Based on these indicators, Richardson expects 2017 will bring a more normalized housing market — one that still boasts a healthy number of sales but a moderate rate of price growth.
Home Appreciation Might Slow, But Not Stop
Blomquist anticipates home appreciation to slow nationally to approximately 5% in six months and to 3.5% in 12 months.
“Based on bellwether markets across the country, where sales volume has been decreasing often for several months, I would expect sales volume nationally also to slow down in 2017,” says Blomquist.
“That slowdown could be accelerated by rising mortgage rates,” he says, “but even without rising interest rates I think enough markets are now hitting affordability and inventory constraints that demand will slow down. And as demand slows, inventory will gradually increase in 2017.”
Many parts of the country could see a small dip in property values over the next six to 12 months, predicts Brian Guth, regional vice president/branch manager for CrossCountry Mortgage, Inc.
My crystal ball is fuzzy, but know that I am always reading, listening and learning so I can help my clients make the best possible decision for their next real estate move.
Happy New Year!
Published on 2016-12-30 09:31:53
