As we move forward into this New Year, each of us will probably have our own expectations of eating healthier, losing weight or getting ahead financially. But what should we anticipate from our real estate market? There is a lot to look forward to in 2016.
Home prices expected to rise. Florida’s 2015 real estate rebound “outperformed the nation as a whole,” according to Florida Realtors Chief Economist Dr. John Tuccillo. “Against the backdrop of an expanding state economy with growing employment, home sales should increase by 8-10 percent over 2015 (numbers) and home prices (measured as actual value) should rise by about 5 percent,” Tuccillo says.
The year of the Millennials? Those born between 1980 and 2000, known as Millennials, are expected to start making their real estate purchases. As rents rise, purchasing is now making sense to this group of buyers. This age group will make up approximately two-thirds of the housing transactions over the next five years according to most experts!
Historically low mortgage interest rates are holding steady. For the first time in seven years, on December 16th, 2015, the Federal Reserve boosted its key rate 0.25 basis points having an indirect impact on long-term mortgage rates. Even with that said, mortgage interest rates are still staying near 4%. 2016 will probably be one of the last times homebuyers can take advantage of low rates. “We’ve had it for so long that you start to think it’s your American right to have that kind of money, but it’s a ridiculously low-interest rate, even if it were to move up a couple of points.” says, Barbara Corcoran, investor on ABC’s “Shark Tank”. This rate is still historically low; it is still a great time to buy!
New home construction continues. A good indication of a healthy real estate market is the amount of new homes being built. Take a look around your neighborhood and you will see the evidence of this. 2016 should continue to be a strong year for the builders with the expected growth in our area.
Limited supply and strong demand makes for a robust rental market. Our rental market continues to be strong with vacancy rates expected to stay below 5% in 2016. This is good news for Landlords or those of us wishing to become a Landlord.
There are exciting times ahead for 2016 … with home prices expected to rise by 5% and with historically low interest rates still available, these are promising indicators of a strong market. Match this with our Millennials’ major influence in our market and it looks like we have a solid future just around the corner. If you have been on the fence about what to do, whether it is an investment in a rental property, or finding your perfect home, this is the time to make your move!