As we head into the new year, the North Texas and Collin County real estate and housing markets will continue to be strong and very competitive. The biggest concern will be available inventory to purchase and home affordability. Interest rates are expected to rise at least twice and possibly during 2017 and could reach 5 percent by the end of the year. As home prices have risen over 41 percent in the last five years, a rise in interest rates as well could affect the first-time home buyers ability to purchase. The reality is that home prices will surpass income growth for the sixth straight year in 2017!
You can expect millennials and baby boomers to dominate the housing market once again. Both of these generations are facing life changes that historically motivate people to buy or sell a home. It is possible that baby boomers could make up as much as thirty percent of home buyers in 2017. Millennials could exceed that number and be responsible for 33 percent or one-third of the buyers in 2017. Overall, it is expected that existing home sales will surpass 6M in 2017!
Low inventory of homes available to purchase, will mean that buyers should be prepared and ready to act quickly and have lender’s approval letter in hand and ready to submit with their offer. In the North Texas and Collin County housing markets, the highest demand is for homes priced under $300,000. Homes priced over $400,00 will have longer times on the market and much less competition between buyers. The market is in need of more starter type homes that fit the budget of the first-time home buyer and not so many luxury homes. Therefore, it is anticipated that more new home builders may offer a lower cost and more affordable home in their production plans.
Source: North TexasReal Estate Information Service (NTREIS), RIS Media, WalletHub
Steve Lester, REALTOR® is with Keller Williams Realty living in Allen, Texas.