Reports anticipate that 2016 will be a healthy year for the real estate market, so if you or your clients are considering buying or selling a house this year, here are some tips from professional realtors. The tips can help guide everyone from house-hunting virgins to flipping fanatics through the market specifics for the next year, cutting through the clutter of real estate advice to highlight what is most important for buying or selling a home in 2016.
“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory and fierce competition between buyers,” said Jonathan Smoke, chief economist for Realtor.com. “Buyers looking to close this year need to keep an open mind and be prepared to move quickly when they find a home that meets their needs. For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly.”
- Be the early bird. Over 85 percent of buyers who plan to purchase in the next year intend to buy in the spring or summer of 2016, according to our most recent Realtor.com survey. With roughly 50 percent more listings inventory relative to the number of potential home sales expected in January and February, buyers who start their search early face less competition with nearly the same number of homes.
- Comparison shop for mortgages. Mortgage rates are expected to reach 4.65 percent and prices are predicted to rise 3 percent year over year in 2016. Buyers planning to finance their purchase should put as much effort into getting the right mortgage as they do finding the right home. A lower interest rate can make the difference in qualifying for a home and save thousands over the life of the loan.
- Consider a new home. In 2016, the number of new homes on the market is expected to grow more rapidly resulting in a 16 percent increase in new home sales year over year. Buyers should consider the new home options in their market; they are likely to have less competition and to enjoy a broad selection of homes. While new homes are typically higher in price, they are usually larger and offer performance advantages and warranties that could reduce operating and maintenance costs. Markets where new homes will capture a higher share of sales include: Boise City, Idaho; Charleston-North Charleston, S.C.; Salt Lake City; Nashville-Davidson-Murfreesboro-Franklin, Tenn.; and Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.
- Buy a home in the Midwest or South. The biggest issue expected to hold buyers back this year is an inability to find a home in their price range. Considering a home purchase in the Midwest or South may be a good option for those who really want to close in 2016. Local markets such as Dayton, Ohio; Birmingham-Hoover, Ala.; Harrisburg-Carlisle, Penn.; Augusta-Richmond County, Ga.-S.C.; and Des Moines-West Des Moines, Iowa offer buyers high affordability, increasing inventory and favorable lending standards.
- List during peak season. Unlike buyers, demand benefits sellers. Prime home buying season begins in April and reaches its peak in June, according to Realtor.com analysis of home sales. Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings.
- Price a home to the market. In 2016, prices are expected to increase nationally 3 percent year over year. Local prices changes are anticipated to be more dramatic with markets such as Stockton, Calif. and Las Vegas, Nev. expected to increase by 10 percent. Sellers who work with a local realtor to optimize the price of their home based on its unique features and surrounding neighborhood are often able to receive the highest price for their market and sell more quickly.
- Offer incentives. Last year, 37 percent of all sellers offered incentives to attract buyers. Sellers who are open to negotiating beyond price are more likely to find scenarios that result in wins for both sides resulting in a potentially faster sale and more seller profit.
- Sell a home in California. While many local areas are showing favor to sellers this year, California markets are accelerating past the positive national averages and showing extremely favorable conditions for sellers. Robust job growth, increasing prices and limited inventory have sellers ready for big gains in Stockton-Lodi; Bakersfield, Calif.; Fresno, Calif.; and San Jose-Sunnyvale-Santa Clara, Calif.
Realtor.com’s 2016 Housing Quiz gives buyers and sellers a way to test, and boost, their real estate savviness. It also features an interactive infographic that shows the best growth markets for 2016, the top 5 markets for each of the three age groups –millennials, young gen X-ers and retirees – expected to lead the 2016 buying spree, and a year-over-year comparison of some of the most important national housing and economic indicators.