Here are 3 of my real estate predictions for the Haymarket and Gainesville VA market in 2016 …
Time sure does fly! It seems like yesterday I was writing my real estate predictions for the 2015 real estate market and here we looking at the 2016 spring market … the busiest time of the year.
Last year my predictions were modestly optimistic and held true. Inventory was high in our area and sales slowed, but there was still an overall increase in home values and a healthy amount of market activity. Interest rates moved slightly, but with no major impact.
Here are three real estate predictions for 2016:
1. Interest rates on mortgages will increase.
This isn’t really a prediction because the Federal Reserve already raised its key interest rate in December—for the first time in nearly a decade. It’s a sign that the economy is healing. It was a small hike but will affect home buyers and savers. This move will now put mortgage rate increases in motion, at a gradual and modest rate. In our area, an increase will affect all buyers but it may affect first-time home buyers more as they enter the market for the first time.
2. Getting a mortgage is starting to get easier.
There are still stringent eligibility requirements, but lenders have eased up a bit on loan approval standards and more loans were approved last year than in recent years. Furthermore, programs are available for first-time home buyers including low downpayment options like the new HomeReady Mortgage.
3. Our local real estate market will be split—part buyer’s market, part seller’s market.
One of the things that affects home sales in our region is that home prices in many of our communities exceed the national average—and in many cases, the average buyer’s budget. Millennials are coming of age and according to National Association of Realtors (NAR), millennial first-time home buyers are predicted to make up the largest percentage of buyers this year. These buyers will be out there, and as I mentioned, it’s getting easier for them to get lending.
Therefore, demand on homes in the $250,000 to $500,000 price range will rise and sales will increase—as they did substantially in 2015. This will give sellers in these prices ranges an advantage.
As for sellers in the higher priced ranges, we have seen a gradual recovery in the housing market since 2010 (see A Gradual Recovery in Haymarket Area). This has given many homeowners the confidence to sell and move on. Therefore, there has been an increase in inventory in higher price ranges. There are simply more homes for sale in the higher ranges than there are active buyers. These homes are STILL selling at good prices, but as I’ve said before, the homes that are more desirable, best prepared and priced fairly are the ones that sell faster. Therefore, if inventory continues to rise, it may sway towards buyer’s market in this segment.
This will give you an idea. You can see there are more homes for sale in the higher range, yet more buyers in the lower range …
See all homes for sale in Haymarket and Gainesville between $250,000 and $500,000
(126 Properties as of 2/4/2016)
See all homes for sale in Haymarket and Gainesville between $500,000 and $1,000,000
(150 Properties as of 2/4/2016)
RELATED: Tips to Sell Your Home in the Haymarket Area
See this article in the print version of Haymarket Homeowner: