2016 is shaping up to be a great year for the real estate market nationally and locally. Interest rates are remaining at historic lows, employment is strong, housing starts are up, values are increasing and demand is high. There are challenges though as inventory has remained low for several months which has impacted affordability.
Matthew Gardener, the Chief Economist at Windermere Real Estate recently wrote: “In 2016, I believe we’ll see some growth in sales activity, as well as continued price growth – just at more modest levels than last year.”
Locally, the impact of NAS Whidbey expanding, and inventory shortage has led to a strong seller’s market and increase in home value not seen in nearly a decade. With the base expansion continuing for at least another year, we should not expect the market to slow anytime soon.
Freddie Mac seems to agree, here is a quote from their March Housing Outlook Report:
“Despite the challenges facing the housing market, we expect this to be the best year for housing in a decade. Home sales, housing starts, and house prices will reach their highest level since 2006 according to our latest forecast…Challenges remain, with low housing supply and declining affordability being a key concern in many markets, but on balance, the housing markets in the U.S. are poised for the best year since 2006.”
A few weeks ago, Jonathan Smoke, the Chief Economist at realtor.com, exclaimed: “All indicators point to this spring being the busiest since 2006.”
At this point, we should feel very confident in the market over the next year. Controls on lending have reduced the loose money that was a major contributing factor to the market crash a decade ago. Supply and demand fueled by qualified money is what is driving values up. This should be considered healthy and a normal occurrence that happens in the market cyclically.
If you would like to discuss what this means for you in your current housing situation, I would be happy to meet with you.