Job numbers have been great around the country, and those strong job numbers have translated into a nationally strong housing market – maybe the best since we’ve had since the start of the recession. Although we have had considerable volatility in the stock and bond markets this past week, the fundamentals for local real estate still look solid. While there may be cooling in some markets due to supply and mortgage rates, Americans will still be on the hunt for the perfect home.
The National Association of Realtors has projected that existing home sales in the country will reach 5.3 million by the end of 2015, and they expect an increase 3 percent over the next year. One of the main fears that could slightly derail these expectations is a spike in the mortgage interest rate that was expected this year but is likely to happen at the beginning of 2016. The Federal Reserve postponed any increase during their last meeting, but they will resume the conversation about interest rates this month.
Thankfully, the good news that has permeated the real estate industry since the start of the year has created a growth in consumer confidence that will manifest as sales activity in 2016. There are many homeowners that have been sitting on their home’s equity waiting for better conditions to risk their investment. Next year will see a surge in buyers that have been waiting to move up to the next sized home. The NAR said this phenomenon would be particularly true in the Western states like those homes for sale in Lafayette CA. These homeowners will spark an increase in home inventory in tight markets like the Bay Area. New housing starts are projected to surge in 2016, but an increase in sellers will go a long way to providing housing accessibility in Bay Area markets.
This increase in existing home sales is just one of several additional trends announced by analysts in recent days. I’ve compiled a list of some of the most interesting trends projected for 2016 that could impact homes for sale in Lafayette CA.
1. Slow Down in Coastal Markets
If you live anywhere near an ocean, then you know those markets are typically hot and expensive. Homebuyers love the water, and homes on the coast, while not recession-proof, are usually very consistent. According to analysts with US News, many West Coast Beach Markets will experience cooling in 2016. They aren’t predicting a total stall, but they have seen data that implies that homes in coastal markets are showing declining sales prices. This could provide an incentive for local Lafayette retirees to consider a move to coastal communities that may see softening prices in 2016.
2. Increasing Demand For Master Planned Communities
People who live in cities live there for the many conveniences provided by an ease of access to grocery stores, schools, and shopping centers. As prices in cities across the country climb upward, many people are choosing to opt for suburb communities similar to the homes for sale in Lafayette CA. Former city dwellers are moving to the suburbs in search of Master Planned communities rich in amenities. They want homes that are within walking distance of their favorite coffee shop. This preference is especially true of young families. They have a preference for suburbs with urban offerings. Here in Lafayette, we are witnessing the construction of numerous town home projects that are within walking distance to downtown. For those considering a downsize, Contra Costa’s east county offers several attractive master planned retirement communities, and for those looking for a more natural setting, the Sierra foothills communities offers numerous options.
3. Millennials Ready For Single Family Homes
Many young earners in the Bay Area have condos or first homes that they have outgrown. They are ready to move up to the next level of home. As mentioned earlier, these buyers are struggling in the San Francisco market. Between constricted inventory and high prices, they have been presented with a limited selection of homes from which to choose. Next year may present an opportunity for Millenials to make the leap from starter home to family home. Many single-family homes are expected to enter the market from older buyers seeking smaller accommodations or Generation X homeowners ready for larger homes for older children.
No one knows what 2016 will bring, but these predictions are a great place to start if you are planning to list your home for sale or if you are in the market for a home in the coming year.