While it’s only just started, I’m tremendously excited for 2017 and am already pleased with the direction that the real estate space seems to be headed towards. With more and more renters becoming interested in homeownership and new homes being built every day, there’s no reason to believe that the real estate industry won’t grow in leaps and bounds this year.
Based on its progress over the last year, the luxury real estate market in particular seems poised for a major growth spurt. Here are a few reasons why I’m optimistic about the market this year:
New Mortgages
This year, buyers will find it easier to finance their luxury real estate purchases as Fannie Mae and Freddie Mac will provide backing for larger mortgages for the first time in more than 10 years. This rise in the conforming loan limit is the first of its kind since 2006, and serves as an indicator that the housing market is growing at a spectacular rate.
Foreign Buyers
International buyers’ demand for U.S. luxury properties hasn’t slowed a bit, and in fact, many are expanding their horizons. Europe and the United States have always been sought-after by international investors, especially Asian buyers, and as our country’s housing market continues to be looked at as safe and profitable, more and more foreign buyers are likely to make the leap into American luxury real estate.
Historical Growth
Over the next 12 months, the ultra-luxury market will likely see more affordable prices given the recent period of high asking prices and decreasing absorption numbers (which, from a historical perspective, is usually followed by an increase in affordability). With the luxury real estate market becoming more accessible, we’ll likely see an increase in total purchases made from now until the new year.
Post-Election Period
Generally speaking, real estate markets find themselves in a calmer state after elections, particularly presidential elections. For those that find themselves worn out by a heavy campaign, the post-election period often becomes a time of restoration as would-be homebuyers turn their thoughts towards their home lives.
It’s also quite common for buyers to wait until periods of political volatility end to make major financial decisions, such as buying a home, so we’ll likely see an increase in purchases in both the luxury and non-luxury real estate markets.
Source: Inman