New Year Predictions: What’s on Tap for Real Estate in 2017?

8 January 2017

The new year is upon us and with it comes new factors which can and will affect real estate throughout the year. Here, New York Power Broker Louise Phillips Forbes of Halstead Property makes her predictions for what real estate will look like on a national scale in 2017, and how you can make the most of it. Keep an eye on the following:

1. Increased interest rates will be a game-changer.

While interest rates are still some of the lowest they’ve been in years, they are increasing and will be a motivating factor for buyers early in the first quarter, especially since 95 percent of first-time homebuyers are dependent on financing. Expect them to act quickly and lock-in reasonable long-term loans enabling them to make long-term buys.

2. The market is not in decline; it is re-setting.

Nationwide, home prices are forecast to slow to 3.9 percent growth year-over-year, from an estimated 4.9 percent in 2016. The biggest shift will occur in the ultra-luxury market, especially in urban environments with a massive construction boom, where the highly accelerated and unsustainable growth for the past five years lead to inflated asking prices and declining absorption rates. As a result, New York City in particular—a national leader in the housing market—is experiencing a very efficient re-setting of the high-end luxury sector, with values down 25- 40 percent to more realistic prices, establishing a growth pattern that is more in line historically...

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