2015 ending saw the real estate market rising rapidly to achieve high growths. This trend has continued in 2016 with the housing market boom rising to the levels of pre recession times. This has been mostly due to the favourable economy and low interest rates. Due to these factors as well as the uncertainty in the foreign market has caused people to invest at home market particularly in the real estate, which has been giving quick returns and with zero downside in this booming market.
Now will this trend continue in 2017 or will this change over the coming years.
General Perception of Real Estate Market in 2017:
The general perception of the real estate market has been quite optimistic up until this year. Now with the Elections and the US FED rate hike, the perception seems to be changing. Although the rates have not been hiked yet, but the policy makers are very close to making the change. Although this change is good for the economy in general, it spells a decline for the housing market in particular. However, with a slowdown eminent in China and the global situation being bad, investors see the US market as a safe bet. This should act as a counterbalance to the rate hike but some decrease in the growth percentage of the market is to be expected.
According to the PricewaterhouseCoopers (PwC) survey done on the real estate market with a sample size of 400, indicates a drop in positive sentiment from 69% to 84%, which was done even before the news confirmation on the interest rates.
Expert Opinion on the Housing Market:
According to the industry experts the housing market will continue to grow but at a slower rate. Although the home prices continue to increase from last year, however the housing appreciation is not happening at the same rate. Infact in many of the previously high value area, the rates seem to be going down and the rate of appreciation is increasing in the secondary markets.
The predictions for the next Year are:
- Rates will continue to rise but at a lower rate than 2016: Majority of the experts say that the market will continue to grow next year however there is some difference over the rate of growth. Many state that the rate will decrease in the next year. Many veterans of the industry are happy and say that while the increase has touched the rates of a pre-recession value, there should not be a situation where a new recession is caused by the real estate markets and thus it should remain realistic.
- Homes will Become affordable: Homes will become more affordable than in 2016. Over the last quarter the homes are becoming increasingly in the budget of the users. With 6 of the last 10 homes bought being affordable for the buyers. This will only increase in the next year. Even though the rate of unemployment has decreased and the salaries have increased, they have not kept up with the rate increase in real estate. This is the market correcting itself.
- Rising Rent a major push for buying real estate: For the residential market, the rent has risen considerably and the families are thinking of buying real estate as a long term investment with the mortgage being at par or sometimes even lower that their rents. If the trend of rising rent continues then the housing market will continue to grow in 2017.
Right Time to Invest in Real Estate:
According to many experts, now is the right time to invest in real estate if looking for a long term opportunity, with the interest rates lower than ever and the market prices not sky rocketing. However if the investor is looking to make some quick bucks by selling the property at a higher rate, then now may not be the best time for them.
The Real Estate market will grow and will continue to reach new heights. This will now onwards happen at a steady rate which will be beneficial for the home owners as well as new buyers. The market appreciation will also get better with the coming months and we may see a positive and upward shift in the real estate market in 2017.