2016 is almost two months in now and the most savvy real estate agents are already hard at work trying to decipher what trends are going to be guiding the real estate market for the rest of the year.
Low interest rates accompanied by steep credit requirements have been the driving force in real estate for the past few years, but things are shaping up a bit differently for 2016. We are also in the middle of an industry transition where buyers are getting younger and choosing different types of properties.
With all of that in mind, let’s take a closer look at 6 real estate trends to keep your eye on in 2016:
Threats of Rising Interest Rates
Since low interest rates have been driving the real estate industry for the past decade, there is obviously going to be quite a bit of uncertainty surrounding the idea that the Federal Reserve is once again talking about raising those interest rates.
If interest rates start to trend up, housing will naturally become less affordable for consumers and also less attractive for investors. However, the threat of rising rates could also cause a number of buyers to flood into the market in an attempt to get the last good deal.
Massive student loan debt has been a major impediment for young people looking to purchase homes in recent years. But the new generation of young adults appears to have learned a few lessons from their older siblings.
Young buyers today are finding ways to get through school with fewer student loans and are putting themselves in better positions to capitalize on low interest rates.
Modern, Move-In Ready Properties
One of the primary things that those younger buyers are looking for is properties that are either new or updated and in move-in condition. Popular modern features like open-concept floorplans and granite countertops are huge selling points that buyers will still be looking for throughout 2016.
When those modern, move-in properties are located in the downtown areas of major cities, they come and go very quickly. This trend will definitely continue throughout 2016 as the city life in the 21st century has taken on a whole new image for many forward thinking buyers.
One of the biggest reasons that downtown areas are appealing to buyers is that they are generally stocked full of amenities. Buyers this year have been more focused than ever on the local restaurants and shopping areas that surround a property, so the most successful agents of 2016 will definitely be highlighting those things in their marketing materials and during conversations with customers.
Less Investment Properties
Another trend to watch out for this year is that investors are more and more particular about the type of investment properties they are looking for. Rising home prices combined with the threat of rising interest rates could make any and all forms of real estate investing more risky in the coming years than it has been in the past.
From the looks of it, 2016 could be slightly more challenging than 2015. The possibility of rising interest rates combined with more selective buyers and rising home prices could result in a little more difficult selling environment.
But there will still be plenty of real estate changing hands in every market, so while it pays to be conscious of these trends, don’t let them slow you down!