This post was originally published and is credit to this site
There’s no crystal ball for predicting what 2017 will bring, especially with the arrival of a new president. How the election will affect the real estate market, well, no one really knows.
Yet the data crunchers at the real estate website Redfin have predicted what the housing market has in store for the new year under our newly elected President Trump. They say there are major Trump policies that could significantly affect the long-term course of America’s real estate market, infrastructure spending, tax cuts and changes to immigration policy.
As these policies start taking shape, there’ll be strong buyer interest, better access to credit, and a modest increase in the number of homes for sale will allow home sales to grow, but not as much as last year, Redfin says. Although price growth will hold steady, “homes will sell even faster next year, breaking this year’s record as the fastest real estate market,” the website says.
Over at Gagliardo Realty Associates in River Forest, owner/broker Andy Gagliardo said he feels activity slowed down in the second half of 2016, due to the presidential election and the questions surrounding future mortgage rates. Yet he’s hoping that slow-down will pick up when winter ends.
“I am very optimistic for the spring of 2017,” said Gagliardo, who has a condo project in River Forest at the corner of Bonnie Brae and Thomas that he’ll start marketing shortly. “Inventory has been low for the second half of 2016. I expect to see more inventory and prices to rise a bit from the end of ’16.
“I think everyone will agree that they expect the mortgage rates to rise some, but I don’t think they will go crazy … maybe eventually top out around 4.75 to 5 percent for a conventional, non-jumbo loan,” said Gagliardo. “That is still quite low in the big scheme of things.
“Hopefully, that will give buyers a sense of urgency to pull that trigger,” Gagliardo said. “The key will be if we can sustain it throughout the whole year. … 2016 did not keep the momentum.”
This year will see a continued increase in units sold in the Chicago area, as well as some moderate appreciation, predicted John Lawrence, broker/owner at Weichert Realtors — Nickel Group in Oak Park.
Lawrence said that while 2016 saw appreciation in the region around 4 percent, he would expect that number to be closer to 2 percent for 2017.
“The reason for this slowdown in my opinion are factors that are impacting affordability for many buyers — lack of wage growth, the rising interest rates, and rising prices that are approaching pre-recession highs in some markets are going to price some buyers out of the process,” said Lawrence. “If we have entry-level buyers who are pushed out of the market, it will have a domino effect on the higher price points that are relying on the move-up buyers to purchase. This could cause the upper ends of the market to stagnate, while the lower end still has growth.”
Lawrence, too, mentioned the impact of interest rates, which he feels will most likely be in the upper fours rather than threes, he said.
“On the positive side, we are still experiencing historically low interest rates, consumer spending is still strong, and unemployment is low,” said Lawrence. “We are also going to see more millennials join the ranks of the homeowners, and the baby boomers are continually looking to downsize. This group of nearly 150 million people will help fuel the real estate market for the next few years.”
The new administration is expected to be friendly to real estate, and Lawrence said he doesn’t expect to see any new regulations on the industry. If anything, there may be some of the provisions in the Dodd Frank Act (passed by President Obama, the act brought significant changes to financial regulations) dismantled, potentially speeding up the home loan process, said Lawrence.
Roz Byrne and her team at RE/MAX In The Village in Oak Park have been in business 15 years, and in 2017, they are aiming to reach their 500th family served. Byrne is foreseeing a healthy 2017 market with buyers aplenty. But sellers — possibly not so much.
“I have two clients who have put their plans to move on hold because of the election results, but the general conventional wisdom is that 2017 should be another year with more buyers than sellers, and with more sales and higher prices overall,” said Byrne. “In most cases, if someone is thinking of moving they should go for it.”
Felicia Dechter is a freelance columnist for Pioneer Press.