At long last, the recession seems to be behind us, and the U.S. real estate market appears to be on solid ground once again.
Noted local economist Elliott Pollack recently stated, “The outlook for housing is quite exceptional, given the outlook for a post-2007 world…The parade of horribles that have been affecting housing are almost all improving.”
The positive outlook also derives from the fact Arizona remains one of the faster growing states in the country. Here are some of our predictions for 2016:
- Millennials Will Stake Their Claim. While the aftermath of the recession delayed their first-time home purchases, millennials (the oldest of which are in their mid-30s) are getting married and becoming first-time homebuyers. It is expected they will make up a large share of the 2016 buyers.
- Boomerang Buyers Return. While many local residents lost their homes during the recession, this is the anticipated year of their grand return. After a foreclosure or short sale, the waiting period to purchase a home again is seven years. If any individuals had foreclosures in 2009, they will be poised to return in 2016. The market is ready to welcome them back, and lenders also are poised with strong programs and rates, which are still low.
- Interest Rates Will Increase… A Little. The year 2015 has shown us the Fed continues to move cautiously. However, most housing analysts and economists are anticipating about a 1 percent increase in rates over the next 12 months.
- Custom Home Building Will Flourish. While production home construction flourished in 2015, we also have seen an increase in custom home starts. Lots sold rapidly, with buyers viewing interest rates and affordable land prices as an opportunity to build the home of their dreams. We expect this segment of the market to continue to flourish in 2016.
- Existing Home Values Will Increase. Real estate analysts all predict a 4 percent to 5 percent national increase in property values in 2016. This will be the positive result of more buyers entering/returning to the housing market, as well as continued economic growth.
- The Luxury Market Will Revive. Jumbo financing has become some of the easiest financing to get, and with rates the same as conforming loans. With the low rates and an improving economy, we will see a higher percentage of luxury sales in 2016.
As we speak with our real estate colleagues across the Valley, the general consensus is 2016 is going to be a robust year for real estate. We continue to believe that the East Valley offers some of the best real estate deals in Maricopa County, and hope to see great growth in all sectors over the next 12 months.
Wishing you all a happy and prosperous New Year. Please don’t hesitate to call me for a New Year’s market evaluation, or to help you find your next dream home (or lot).
John Karadsheh is the Designated Broker for KOR Properties. He has been a Multi-Million Dollar producing agent for more than 12 years, and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS). In 2014, John was voted the No. 1 Real Estate Agent in Arizona by Ranking Arizona. You can reach John at (480) 568-8684, or visit his website at KORproperties.com. KOR Properties also is the creator and one of the founding sponsors of Mesa Food Truck Fridays.