Happy New Year! With the start of 2017 a few of my friends and I were discussing what we think the housing market will look like in 2017. I’d love to hear what you expect in the New Year. What do you think 2017 has in store? We were also talking about whether Trump becoming president will have any impact on our local housing market. Would love to hear your thoughts.
Greg, Grand Junction
Yes, the beginning of 2017! What is in store for our market? Well this is a question that seems to be making the rounds and I am happy to take a stab at what I see inside my crystal ball! First, a disclaimer, I reserve the right to be wrong! As I am sure you are aware, predicting what WILL happen is often met with the reality of what DOES happen and those two things don’t often dance to the same tune! With that being said, I think there is plenty to be optimistic about and I am excited for what lies ahead for our local real estate market!
I truly believe that our local market will remain strong, especially in the lower price ranges. Currently, we have less than 4 months of inventory in homes priced under $300k, thus we can expect this price range to remain brisk and very competitive. If 2016 showed us anything, it is that properties, especially in the under $300k price category that are in good condition and priced appropriately, go fast. There are plenty of buyers out there looking for a nice clean home that is priced well and when they find it, they are eager to purchase. In this price range, I expect this trend to continue as inventory levels remain tight. Our local job market and wage scale supports the lower price points while the lack of high paying, executive level jobs, is leading to sales that are not as brisk in the upper end price ranges. The upper price points $400-$500k are hovering closer to an inventory level that is more neutral, not favoring the buyer or the seller, with 6 months of inventory (6 months is considered a “healthy” inventory level). The $500k+ price range will remain challenging. At these higher price points, patience and proper marketing will be required as inventory levels will remain relatively high and sellers will be competing for buyers. Although the higher price ranges are slower, relative to the lower price points, we did see positive sales growth in 2016 and I am looking forward to that momentum continuing to strengthen in 2017!
Interest rates will undoubtedly go up and I expect we will hear a lot of chatter about this, however, I don’t expect them to advance at a rate that will significantly impact sales. If rates are going up, the economy is showing signs of sustainable growth and I don’t know anyone who is not in favor of a stronger economy! New construction has shown growth over the past 4 years with annual building permits rising from 440 – 480. I am expecting this number to climb as the low inventory levels will spur on building. One road block to building growth may be the limited number of available ready to build lots, thus leading to a real push for residential development.
Overall we are staring down the barrel of another successful real estate year in the Grand Valley. All areas are showing real signs of growth and prosperity and even though there will be growing pains I am confident that we are all ready for a little pain, in the name of growth!
Regardless of the Presidential election, locally I think we are poised to see the advances of the past several years continue and I find that optimism reigns in most circles. Onward and upward in 2017!
The Kimbrough Team