We’re in the second quarter of 2016 and the real estate predictions for this year continue to be big news. A recent article reported on three trends to watch this season in the housing market. All three, according to “3 Real Estate Trends to Watch This Spring” published April 20 on thestreet.com, are good news for sellers.
Here is what thestreet.com contributor Than Merrill said is trending right now:
1. Inventory turnover is favoring the seller.
Real estate experts say that six months of housing inventory equals a balanced market. Anything fewer tilts the market toward sellers. The number of homes for sale has dropped 35% during the last four years, and recent reports put the housing inventory cycle at about 4.4 months, according to Merrill. In response, he wrote, homes on the market should draw a number of offers, and this competition for available housing should drive up prices.
2. More buyers will turn to new home plans.
With home prices likely to rise this year, home buyers are looking for alternatives, according to Merrill. Experts such as Trulia’s chief economist Ralph McLaughlin are predicting an increase in new home plan purchases and homes that have yet to be built. McLaughlin has already forecasted a decade-long high for homes being purchased off of a plan.
“Why? The inventory of existing homes continues to fall,” McLaughlin said in the article. “Low existing inventory likely pushes prospective buyers away from existing homes towards new homes, and as new home sales rise, this allows builders to sell more new homes off plan.”
3. Buying a house remains cheaper than renting.
According to a report by Trulia, buying is cheaper than renting in 98 of the 100 largest metro areas in the country. Even so, many Americans still believe that renting is the cheapest way to live. A Freddie Mac survey recently found that seven in 10 respondents believe that it’s cheaper to pay rent each month than a mortgage, and more than half said that they would be willing to keep renting for at least another three years. In addition, higher rents are preventing would-be homeowners from being able to save for a down payment.