Each year, the real estate trends change. The market and the economy are the two major reasons. Since the beginning of 2016 things have changed. What was expected at this time last year differs a bit than what is expected for next year? There are a few real estate trends that are expected to shape home buying in 2017.
First Time Home Buyers Are Flooding the Market
Back in 2015, over one-third of the people who were shopping for homes identified themselves as first-time home buyers. As we are about to head into 2017, that number jumped to over 52 percent. This means that over half of the people who are shopping for a new home today are first time buyers. This means that with all of the first time buyers looking for new homes that the competition for affordable starter homes is going to be fierce. Of all the first time buyers looking for homes, 61 percent are millennials. This means that most of the first-time buyers are going to be under 35 years old. There are three reasons that this group of young people is going to be looking for a new home. Some of these reasons include:
- The individual is getting married or they are going to be moving in with their partner.
- The individual is getting tired of where they are currently living.
- The individual is planning to start a family and they need more space.
- The individual is tired of paying someone else’s mortgage.
- The individual wants to move further out from the city.
Homeownership Barriers are About to Change
In 2016, there were not enough new homes being built and the interest rates were very low. Throughout 2016, there has been a lot of talk about how the lack of inventory has been keeping the homebuyer from buying homes. This resulted in higher prices while people’s incomes were staying the same. Houses were flying off the market and it became a problem for many people. The people who were hit with this the hardest were people who lived in big cities, such as New York City, Atlanta, Dallas, Miami, San Francisco, Denver, Chicago Phoenix, and Seattle.
This inventory plague is the reason that 40 percent of the people who were shopping for homes didn’t end up buying in 2016. In 2017, this won’t be the biggest obstacle for homebuyers. The problem in 2017 is expected to be mortgage qualification issues, such as credit scores and down payments. When it comes to their biggest problems in 2017, 37 percent have said that coming up with the down payment is what is going to prevent them from buying a home and 30 percent are worried about being able to find a home that is within their budget.
Homebuyers Are Looking For Home Features and Thinking About Family and Finance First
A survey was sent out to people considering buying their first home in 2017. They asked the shoppers to take 100 points and put them towards 20 home and neighborhood attributes. In general, first-time buyers were looking for the following:
- Large yards
- Quality construction
- Safe neighborhoods
- Newer homes
Many millennials who are buying homes are looking for single family homes so that they can have the space for their growing families. These people are less likely to buy a multi-family home or a condo.
Suddenly, The Suburbs Are Cool
Years ago, young people and first-time homebuyers were trying to buy away from the suburbs in favor of the city where things are exciting. That is no longer the case. First-time buyers are more interested in family and safety than nightlife and fun. When it comes to the choices that they are making, most want to live in the suburbs, close to an urban area. Others want to stay away from these areas. Either way, fewer people are looking for homes in the city. They want a safe, green place with a lot of open space for their kids to grow up in. Many millennials are looking for suburban homes that is is an adequate distance to the big city so that if they want a night out or if they want to work in the city, the commute won’t be too bad and their kids can still grow up safely and happily.
Prospective Buyers are Looking to Buy in Spring and Summer
Most people know that the cost of homes is highest in the spring and summer. They are less in the fall and your can find a home for the lowest cost during the winter. Nobody wants to move into a new home in the cold, wind, rain, and snow. Not to mention the ice that covers the ground during the winter months. Considering this information, one would believe that these first-time homebuyers were going to purchase when the prices are low. That is not the prediction for 2017. When first-time buyer was asked when they plan to buy, many said in 7 months. This would bring them into the spring and summer when they start looking to purchase a home.
When it comes to how long these buyers have been thinking about buying a home, 73 percent have stated that they have only been thinking about it for three months. It will take them up to 7 months to come up with the down payment, get their credit in check, and find a place that they are ready to call home. Since the homes on the market are expected to start getting sold up quickly in the spring, people who have the means and opportunity to start looking now, before the inventory has already been bought. The problem that occurred in the big cities in 2016 when there were no homes left will happen in the spring and the summer, but this year, it will be in the suburbs.
The real estate market changes each year. It is based on the needs of the homeowner, the age of the homeowner, and what they are hoping to buy. If you are considering buying in the year 2017, consider the real estate trends and predictions. If you are planning to buy in 2018, you need to understand that the trends and the predictions are going to change, therefore, you need to change your views accordingly.