2016 Real Estate Trends: What to expect

There are a few trends that are dominating the real estate headlines for 2016. I wanted to take a few minutes and give you an idea of what to expect for the rest of the year as we wrap up our first month of 2016.

Home prices will level out
2015 brought us a steady growth in home prices throughout the nation. This trend was especially noticeable here in the Reno area with a 14% increase in home prices from the previous year. The most noticeable item from last year was the telltale sign that prices would start to level out. In 2015 we saw median home prices in the Reno area remain around $290k for 4 out of the 12 months. This is a sign that we were already starting to see this trend take place. Even with all the new businesses coming our way it seems home prices will not see any significant changes in 2016.

Generational Shifts will move the market
Millennials accounted for nearly 2 million home sales last year. With home markets returning to normal and personal finances improving, it seems many millennials ended their home buying skepticism from 2011 and began to purchase their first homes. This trend will continue into 2016, and with an improved outlook on the economy, should continue to grow. The generation X group is reaching their prime years for financial earning and will be looking to either upgrade their current home or purchase a second property. We will also see the Baby Boomers look to adjust their lifestyle as many are looking towards, or are currently entering, retirement. It seems that 2016 will bring a shift in the market as we see each generation reaching significant points in their lives.

Affordability will be a primary focus
It seems many home builders will be focusing on producing homes in an affordable price range for the year. This trend is noticeable in the Reno area as well with many single family homes being built in the $200-300k price range. As these large companies continue to come to our area and more new homes will need to be built, it seems this price range will be a large focus for the new home builders in our area. How will these affordable new homes affect the prices in our area? This trend will be something to watch to see what kind of impact it may have on resale value for homes, especially when someone may be able to buy a similar new home for nearly the same price.

Rent prices will continue to rise
This is a topic I have touched on before about why now is the time to buy over rent. It seems with the lack of inventory not only in our area, but nationwide, landlords are taking advantage of the shortage and continue to raise the cost of rent. As the rent prices continue to increase much more rapidly than home prices, we may see a trend of renters deciding to purchase a home. It may soon become a no-brainer to purchase instead of rent, as mortgage rates continue to remain low and rent prices all over the nation are skyrocketing. With all the added benefits of home ownership, many on-the-fence renters may finally make the leap into home-ownership.

For more on this topic follow the links below:
http://www.realtor.com/news/trends/five-key-trends-for-2016/

http://www.fortunebuilders.com/4-real-estate-trends-worth-watching-in-2016/

http://www.marketwatch.com/story/4-real-estate-trends-well-see-in-2016-2015-12-09

Advertisements

The Tesla Effect: How The Gigafactory Is Assisting In The New Era Of Reno

Reno, also known as the Biggest Little City, better known by non-locals as a cheaper alternative to Vegas. This is the image that Reno has been trying to overcome, especially within the last few years. Any notoriety Reno had received in any national publication was usually based around gaming, the high level of alcoholism, or the drive-thru divorces. As locals, we know that Reno is an amazing place to live, especially for anyone who loves the outdoors. With some of the best ski resorts in the world, and by far one of the most beautiful lakes in the world, within a short car ride from downtown, we are well aware of how great our city is. But Reno has never been known as a great place for a large company to locate to, or even more so, a place to launch the next big startup. That is, until now!

Casinos, dive bars, and quick divorces are making way for luxury condo towers, tech companies, and manufacturing.

With major companies such as Tesla building the gigafactory and Apple’s expansion of their iCloud service coming to the area, Reno is beginning to see a major shift in the way it is being viewed. The casinos, dive bars, and quick divorces are making way for luxury condo towers, tech companies, and manufacturing. We are also beginning to show the nation that we are a hub for the outdoor enthusiast. Whether it is hiking, biking, skiing, exploring the desert, or just enjoying our amazing views, there is no shortage of outdoor activities for one to partake in. But what does all this change mean for the people that are already here, especially the real estate market?

The arrival of these companies means more jobs in our area, and also the relocation of many existing employees into the Reno area. Experts have forecasted a rise in population to the Reno/Sparks region of about 50,000 people over the next five years. According to the Economic Development Authority of Western Nevada (EDAWN), this will require the addition of 9000 new homes per year. We have also begun to see the rise in home prices over the last year. The Reno Sparks Association of Realtors has reported a 17% growth in the median home price. This is good news for current home owners and future sellers. The addition of new homes will also be good for perspective buyers looking for more availability in what is still a scarce market in our area.

This is an exciting time for our not so little town. We are starting to see the effects of a new era coming to Reno and the future looks bright for our little city to prosper and flourish with a new image as Silicon Valley’s little sister.

To see some of the nationally published articles about Reno click here:

http://www.businessinsider.com/tesla-is-the-best-thing-to-happen-to-reno-since-the-gold-rush-2015-6

http://www.wsj.com/articles/reno-sees-future-and-it-isnt-casinos-1445642382

http://www.bloomberg.com/news/articles/2015-04-10/reno-wants-to-be-silicon-valley-s-back-office

Are Student Loans Hurting Young Homebuyers?

Home ownership, in my opinion, is still part of the American dream, despite the numbers showing it is the lowest it has been in almost 40 years. Nothing offers the sense of pride and value quite as much as purchasing and owning your first home. I bought my first house a little over a year ago, just before I turned 27. That feeling of closing escrow and realizing you have just made not only a huge investment in your future, but one of the biggest investments you can make in yourself, is a hard feeling to beat. With so much talk these
days about the impact student loans are having on young adults, what effect are we seeing in their ability to buy?

Home ownership, in my opinion, is still part of the American dream

Are young home buyers losing the ability to experience this pride, this investment in their
future?

Student loans are at an all-time high, with around 71% of bachelor degree recipients graduating with a student loan. The national average for these loans is just over $35,000, and can vary depending on the region. Total education debt in the US in 2015 hit a new high at $68 billion. This is a large loan for any young adult to overcome just trying to get by day to day, let alone trying to save up for, and purchase, their first home.

I want people to understand the importance of higher education, but more so, I want them to understand the importance of why they need the education first. I feel too many kids go off to college without a clue of what they want to do in life, and spend years, and thousands of dollars, in school only to never use it in their career path. We have been told to just go to college after high school, because that’s just what you do, but why? What are you going to do with that specific area of education? I feel you should take the time to find your passion in life, and decide what you want to do, before investing in the proper education needed to pursue that career, regardless of what it may be.

What I also want young adults to realize is that even with a student loan, home ownership is still within their reach. We have amazing programs here in Nevada that will grant you money to assist with your down payment. These grants cover up to 4% towards down payment and closing costs when obtaining a government loan. An FHA loan requires a down payment of 3.5%. That means with this grant, it can cover your entire down payment and help pay a portion of your closing costs. That means you may purchase your own home with an initial investment of only a few thousand dollars! Think of the investment you can make in your future, owning your home instead of spending the same amount to rent every month. Not to mention, real estate is a vital part in maintaining a healthy and balanced portfolio. With the help of this grant, you can be well on your way to building future wealth.

If you have any questions about this topic or questions about how I can help you with your real estate goals, feel free to reach out to me at any time.

To download my interview about this topic follow the link here:

http://bit.ly/22UqbbY

For more information about grants click here:

http://housing.nv.gov/programs/FTH/Home_is_Possible/

For more information about this topic click here:

http://www.realtytoday.com/articles/57018/20151130/difficulties-first-time-homebuyers-student-loan-biggest-obstacle.htm

http://economistsoutlook.blogs.realtor.org/2016/01/05/student-loan-debt-hampering-home-

What does the Fed’s rate hike mean for you?

On December 16th 2015, the Federal Reserve announced they would raise the key interest rate by 0.25%. This is the first rate hike in nearly ten years and had many people wondering what kind of impact this would have on the economy, especially the real estate market and mortgage loans. So what impact has the rate hike had on the real estate market? Well, the short answer, none. According to Bankrate, the 30 year fixed mortgage rate here in Nevada is still at an extremely low 3.88%. All research has pointed to the fact that fixed rate mortgages will receive little to no impact from the Federal Reserve’s raise of the key interest rate. This should help with some of the skepticism and uncertainty hovering around the future of mortgage rates.

For more information check out the following links:

Nevada Mortgage Rates: http://www.bankrate.com/nevada/mortgage-rates.aspx

The Fed Rate Hike: http://money.cnn.com/2015/12/15/news/economy/fed-rate-hike-2-minutes/