Real Estate 2017 What To Expect Nationally And San Antonio
Real Estate 2017: What to Expect, Nationally and San Antonio
The American housing market is stronger than ever! Home values, prices and sales had their strongest numbers in 2016, a sure sign the market is healthy and strong. According to the Home Price Index from the Federal Housing Finance Agency (FHFA), property values have increased in 58 of the last 62 months and have increased more than 35 percent nationally. Homeowners continue to build equity in their largest investment‚ÄĒtheir homes. The good news is the American real estate market is strong and healthy: home values are up, prices and sales are strong, and millennial first-time buyers are eager to become homeowners.
First-time buyers are back.
Housing forecasts from the National Association of REALTORS (NAR), the Mortgage Bankers‚Äô Association, Freddie Mac and Fannie Mae all predict existing-home sales will surpass 6 million in 2017, higher than anticipated sales for 2016. Who‚Äôs driving the surge? According to NAR, millennials who have put off buying a home are ready to buy. While they may have avoided buying a home due to student debt and limited employment, many are entering their 30s, a time when their attention turns to marriage, family and setting roots with homeownership. They‚Äôre predicted to be the driving force behind home and condominium sales from now until into 2020. (Source: MarketWatch)
What does this mean to you? If you‚Äôre a millennial who‚Äôs been on the fence about buying, now is the time to act. Give us a call to answer your questions about the market and the buying process.
Renters are embracing homeownership
Additionally, many renters who‚Äôve resisted buying are starting home searches due to the economic weight of rising rents. This year‚Äôs home buyers seek to take advantage of comparatively low interest rates and, in most cases, static payments each month‚ÄĒan advantage of home ownership. Rental costs will only continue to rise; if you‚Äôre thinking of buying, now is an ideal time to do so.
What does this mean to you? Every month you pay rent, you lose the opportunity to build equity in a home of your own. Break free from the limits of renting and invest in your financial future. Come in the office and we‚Äôll discuss your options.
Home prices are on the rise.
According to NAR, the median existing-home price not only increased 6.0 percent year-over-year in October, it‚Äôs also the 56th consecutive month of year-over-year increases. Prices are approaching the pre-recession peak.
What does this mean to you? Home prices, and subsequently home values, are increasing. If you‚Äôve been waiting to list your home until you know you can sell it for what you think it‚Äôs worth, now is a great time to do so. We‚Äôll be happy to give you a comparative market assessment of your home and help you get your home in list-ready shape.
If you‚Äôre in the market to buy, be prepared to act.
Homes were on the market for the shortest amount of time recorded since 2009: 52 days. The increase of qualified buyers in the market along with the increasing efficiency of the real estate process means homes are selling faster than ever, and in many cases buyers are engaging in bidding wars and paying over the list price to get the home of their dreams.
What does this mean to you? The home you have your eye on one day may be gone the next. In competitive markets, be prepared to come to the table with a competitive bid.
Looking for a new home?
New-home construction will increase to an average of 1.5 million per year to 2024, according to a report from NAR. However, experts anticipate housing starts will only increase to 1.22 million in 2017, which is less than the 1.5 million new homes required to keep up with growing demand. This inventory shortage of new entry-level homes‚ÄĒtypically purchased by first-time buyers‚ÄĒmay drive up prices in some areas. Home builders have been focusing on multi-family construction for the last few years, but this type of construction has begun to level off providing hope that builders will once again focus on single-family home construction. However, stricter proposed immigration policies may impact new home construction and tighten inventory.
What does this mean to you? First-time and repeat home buyers agree‚ÄĒthere are plenty of advantages of buying a new home. Whether you want a home customized to your family‚Äôs needs or you don‚Äôt want to bother with age-related maintenance, a new home has much to offer. Give us a call to discuss your options.
Affordability pressures are increasing in many markets
Housing affordability in many of the nation‚Äôs largest cities has declined over the past few years, a trend that is expected to continue in 2017. However, there is hope. NAR created the Affordability Index to measure the affordability of homes across the United States. The Affordability Index assesses whether the typical family earning the median family income can qualify for a mortgage on a typical home based on the prevailing mortgage interest rate on loans closed on existing homes from the Federal Housing Finance Board.
The NAR Affordability Index is 170.2 (composite) and 169.8 (fixed), meaning a family earning the median family income has 170.2 percent of the income necessary to buy a median-priced, single-family home. Nationally, the qualifying income is $41,616, but it varies by region. In the Northeast, the qualifying income is $45,024. In the Midwest, it‚Äôs $32,640. In the South, it‚Äôs $36,960. In the West, it‚Äôs $61,824.
What does this mean to you? If you‚Äôve had your eye on a new home, but weren‚Äôt sure if you could afford it, you may be pleasantly surprised. We may have homes in our area that meet your needs and budget. Give us a call today to discuss your home search.
Remember, real estate is local, San Antonio. While these statistics shed light on the national market, we can give you all the information you need to know about San Antonio. Following are portions of article from Jan 16th San Antonio Express News by Richard Webner
Area home sales, prices set records
San Antonio‚Äôs booming growth and low interest rates helped fuel another record for home sales last year, also pushing the area‚Äôs median home price to its highest level ever.
Home sales in the San Antonio-New Braunfels metro area surged 8.3 percent in 2016 to a record 29,508, up from 27,256 in 2015, according to data released Monday from the San Antonio Board of Realtors.
The homes that sold last year were also more expensive to buy. The median sales price climbed 6 percent to $204,300 last year, the first time it has reached above $200,000.
‚ÄúIt‚Äôs another example of what a good economy and what a good market we‚Äôve had, and how much it‚Äôs improved since the bottom,‚ÄĚ said Jack Inselmann, regional director of Metrostudy, a national housing researcher. He said home sales in 2017 will be at least as strong. ‚ÄúWe‚Äôre looking forward to another good year.‚ÄĚ
Experts say local job growth and a rising population, especially in the far North and West sides, are fueling San Antonio‚Äôs home sales. But those trends ‚ÄĒ as well as a labor shortage and tight federal lending policies ‚ÄĒ are also driving up prices, making it more difficult for home-buyers to find cheap starter homes. ‚Ä¶‚Ä¶‚Ä¶‚Ä¶
The local area‚Äôs inventory of available homes ‚ÄĒ measured by the average time it takes for a home to be sold if no new homes are listed ‚ÄĒ dropped again in December to a record low of 3.1 months. Realtors say that six months indicates a balance between buyers and sellers; the last time the local market was balanced was in November 2012. The low inventory makes it a seller‚Äôs market‚Ä¶‚Ä¶‚Ä¶.
Earlier this month, Inselmann predicted that the local housing market would have another good year in 2017 because of strong job growth. But a growing shortage of affordable homes could limit sales, making it more difficult for working-class families and members of the military to find something in their price range, he said. Finding new homes under $150,000 is nearly impossible, and it‚Äôs getting more difficult even at $200,000. ‚Ä¶‚Ä¶
San Antonio‚Äôs home prices still remain low when compared with other major cities in Texas and many other cities in the U.S., said Lorena Pe√Īa, a SABOR board member. The median sales price in Texas last year went up 7.1 percent to $212,000‚Ä¶‚Ä¶
Mortgage rates have been creeping up over the past few months, which has boosted recent sales as homebuyers rush to complete purchases before they go up further, experts say. The national average for a 30-year fixed-rate mortgage was 4.12 percent last week, which is extremely low historically but above the rate of 3.42 percent that was reached in October.
Mark Dotzour, a retired professor from the Texas A&M Real Estate Center, said this month that he expects mortgage rates to rise by a quarter or a half of a percentage point this year, remaining low when compared with their levels in the ‚Äô70s, ‚Äô80s and ‚Äô90s. The National Association of Realtors recently said it expected rates to end up at 4.6 percent by the end of the year.
Are you thinking of buying or selling?
Whether you‚Äôd like to buy or sell a home this year, want to know how much your home is worth, or have general questions about our local market, give us a call! We‚Äôd love to discuss the market with you.
Author: Don Rochelle
January 18th 2017
About Don: Don Rochelle‚Äôs extensive real estate experience started upon getting a Masters in Business Adminis...