I read a lot of articles from Different Economist and one thing that captured my attention was an interview to Svenja Gudell, recently appointed chief economist for the housing site Zillow.com by Reuters.
She was asked about what can we expect in Real Estate this 2016.
Reuters: What markets do you think will be places to watch in 2016?
Gudell: Next year, the combination of unemployment, population growth and the home value growth will make markets like Boise, Idaho, Salt Lake City, Utah, and Omaha, Nebraska, stand out.
Denver, Seattle, Dallas/Fort Worth and Portland, where inventory has been declining in the last year and demand continues to rise, will also be hot locations in 2016.
Are there some areas we should just give up on, instead of waiting for them to recover from the recession?
No. Cities are pretty good at reinventing themselves. There’s a city out there for everyone.
Now that the Federal reserve has officially started to raise interest rates, what will the ripple effect be to the mortgage market in 2016?
Markets really haven’t reacted much. A lot of the expectations of the rate increase have already been built in.
As rates continue to rise—there will probably be four increases of 25 basis points each – we will start to see more of an impact at the coasts, in areas like Seattle, San Francisco, New York, and Miami.
These are already markets where people are already stretching. But, overall the effects will be relatively muted.
Is 2016 going to be the year millennials begin buying houses, now that they are older and the market is more recovered?
I feel like that was our prediction this year and it turns out we weren’t right.
Millennials are going to be bigger and bigger buyers in the market going forward. I don’t think next year we’re going to see a flood of millennials in one month or another. They’ll just trickle in.
They’re taking their time getting to the market and buying a home. They’re getting married later on in life. They’re having children later on in life. So they’re making home buying decisions later on in life.
One issue is that inventory is very low, especially on the bottom end of the price distribution. There are very few of those available, especially in these markets that have the most jobs. That’s particularly the case on the coasts. It’s a challenge for them. It’s a tough market. There is a lot competition.
What kind of new house trends are on the horizon for 2016? Are there any upgrades that are must-haves?
It’s tough with how few new homes are available, but there is a trend among builders to build larger homes on smaller lots. Land is fairly expensive so they are trying to maximize their profits given the high land costs.
Courtesy of time.com
Like what I always said there’s no bed of roses everyday but it’s how you will face it and work on it. I believe that with the proper stage, right audience and right market we will be able to surpass these hurdles. In Real Estate, getting the right Realtor who is knowledgeable enough to know the community, the market and what’s hot is really important because you cannot just rely to a Realtor that you knew but instead look for someone who will be capable of selling it in the lease amount of time and the most amount of money you can get.