A New Year Brings New Real Estate Trends
We hope everyone had a great time ringing in the New Year! 2015 was an incredible year for real estate for many reasons. In fact, 2015 marked the best year for real estate in Birmingham since 2007, which means we’ve come a long way since the recession.
Will the market continue to see improvements? What can we expect for 2016? What will predictions mean for real estate in Birmingham? Let’s take a look!
The Market Continues To Rise
2016 should bring with it a rising home market.
House prices will go up. Home sales will increase. More people are likely to invest in new construction. All of the trends we saw in 2015 will continue in 2016, but they will not continue at the same pace.
The rate at which the market was rising in 2015 will slow in 2016. Is this a problem? Not necessarily. We needed a major boost. For the last eight years the real estate market has been at a record low. A slower rise in the market simply means we are finally leveling out to a decent and healthy market. Balance is finally being restored!
Student Loans
The past year, even with the market improvements, proved hard for Millennials. Why? Student loans. Statistics show that about 70% of college seniors graduated with debt in 2015. The average amount of debt they graduated with was an outstanding $35,051.
Student loan debt makes purchasing a home difficult because it lowers their credit score and makes it financially difficult to balance loan payments with a mortgage payment. This is preventing Millennials from gaining approval for home loans, or being able to afford a new home even if they’re approved.
Fortunately, 2016 could mean improved financial conditions for Millennials. This could mean that for the first time, Millennials may start to make a major impact on the real estate market. If this is true, sellers across the country will be rejoicing!
Rising Rent
Rent in the U.S. is rising at an absolutely insane rate. In fact, rent rates are increasing faster than home prices are rising. This could be good news for sellers in 2016. Because almost 90% of renting households are spending 30% of their income on rent alone, it may be a more affordable option to buy homes. This, combined with the ease on student loans, could equal one amazing year for buyers and sellers alike.
Real Estate In Birmingham in 2016
Real estate in Birmingham can expect to see a similar pattern as the rest of the country, making 2016 a great year for all of your real estate ventures. Are you interested in working with a real estate agent to buy or sell a home? Our ARC Realty agents would love to work with you!
