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: