Recently I had the opportunity to listen to Matthew Gardner, Windermere’s chief economist. The topic was “What Will 2016 Hold for the Tri-Cities Economy & Housing Market?”
There Were a Few Things I Took Away from His Report.
How fascinated he was with the stability of our economy and housing market. The recession did not hurt us like in other markets around the state and country. In addition, the Tri-Cities led the state in employment growth. To see experts marvel about it makes me even prouder to be from our amazing region.
To summarize his hour-long presentation, there were 4 major points I would like to point out.
- Home prices will continue to rise in 2016 at a rate of around 5.5%. Traditionally, we have hovered around the 1-2% appreciation rate.
- Mortgage rates will rise at a moderate pace. So even though it is a seller's market, it is still a great time to buy with rates so low. Right now they are hovering around 4%. In the 1990s they were around 10%, and in 1981 the old timers kept telling me they were at 18%. So we still have it well and will continue to have it well for the foreseeable future. But every time the interest rates rise a full percent, it costs buyers $30,000 in buying power.
- In the last two years, new home options were not what they were in the late 2000s. Expect to see a modest increase this year and next.
- Job growth will continue to drive prices up with our inventory at such a low level. Speaking of inventory, a typical January has around 1050 homes available in our market. January of 2016 had an average of 538.
So in closing, if you know anyone who is thinking about selling, please pass on my name and number! I promise to take good care of them.
