Real estate experts expressed cautious optimism about the industry in 2017, predicting a slowing in some sectors and moderate growth in others.
It’s doubtful markets experiencing double-digit gains in recent years, such as in Miami, Seattle, Denver and San Francisco, will be on the same trajectory in 2017, according to “Optimism, Caution Set to Meet Real Estate in 2017,” a Dec. 13 article on Forbes.com. Contributor Troy McMullen wrote that even America’s biggest housing market — New York City — could see a slowdown (or lack of continued price growth) fueled by an abundance of new high-end housing.
The new year will likely signal an end to seven years of historically low mortgage rates, with rates already starting to creep up at 2016’s end, according to the Forbes article.
National Association of REALTORS® Chief Economist Lawrence Yun expects a solid economy and market driven by first-time homebuyers, which could positively impact the rest of the market. Affordability tensions (the result of rising mortgage rates), coupled with rent and home prices that are higher than incomes could diminish buyer optimism, however, according to Forbes.
While demand for apartments continues to be strong, the rising trend in apartment construction in 2016 is putting more pressure on the real estate sector, MBK Rental Living’s vice president of acquisitions and asset management Craig Jones told Globestreet.com reporter Carrie Rossenfeld in a Dec. 14 article.
“While still moderate at a national level compared to historic standards, the scale of new development within specific submarkets for completion of units in 2017 and 2018 is concerning and may lead to increased concessions,” Jones said.
Jones sees a potential upside to the recent presidential election, noting on Globestreet.com that the new administration might increase federal spending on infrastructure and relaxed environmental regulations. Again, the optimism is cautious, because those policies also could boost potential for inflation and rising interest rates, according to Globestreet.com.
There’s hope that continued demand for apartments will keep the market stable, Rossenfeld wrote.
Inman’s crystal ball shows mortgage money a-plenty, strong job creation and rising retirement accounts – for the short term – as a result of Trump-related confidence in the economy. But other trends could take the steam out of any strides, according to Inman. Those worrisome trends include robots taking the place of service workers and middle managers.
Inman also predicted in the Dec. 13 article that Zillow will expand internationally, and real estate agents might consider getting on this train rather than ignoring it.
Docusign is expected to go public and make big waves in more efficient and paperless documentation, according to Inman. That’s while big lenders embrace equity sharing mortgages for homebuyers in high-end markets who don’t have a lot of money to put down. Inman also noted that walkable neighborhoods will become the hot new trend in luxury housing.