2017 St. Louis Real Estate Forecast

 

2016 was a great year for real estate, and, as we look ahead to 2017, there are general predictions that can be made, both nationally and locally.  While national trends always have an effect on local markets, that doesn’t mean that what happens nationally will apply to anyone’s local market across the board.  However, to better understand and expect what’s to come in your local market, it’s important to keep in mind what’s happening nationally.

 

 

Realtor.com® has presented a comprehensive list of expectations for the 2017 national housing market.  In this forecast, they have indicated some important trends.  Over the last few years, the real estate market has been growing rapidly.  This trend is expected to slow in 2017, but, although that seems alarming to the state of the housing market, it actually indicates that the market is finally stabilizing.  The national real estate market is expected to slow in 2017, but it is also expected to maintain moderate growth.  Nationally, home prices are expected to increase 3.9%, and existing home sales are expected to increase 1.9%.  These are both great announcements for sellers, because it translates to the fact that sellers will be, generally, getting more money for their homes in the coming year.  For buyers, there may be indications that the time to Buy in the US is earlier in the year, because interest rates are expected to reach 4.5% this year.  Realtor.com® is also forecasting that home ownership rates will stabilize at 63.5% after bottoming out at 63.9% in 2016.  They are also forecasting that new home sales are expected to grow 10%

 

There are certain trends that are driving the 2017 market predictions.  For instance, there will be a surge in buyers, leading to a seller’s market, due to the fact that many people will be looking to Buy homes this year.  There are two major demographics expecting to drive the market, Millennials and Baby Boomers.  Millennials have reached an age where they are thinking about marriage and children, leading them to desire home ownership over rental.  Baby Boomers, on the other hand, are thinking about downsizing, now that they are looking toward retirement and their kids have grown and left their homes.  These two huge groups will comprise the majority of the market this year.  Also predicted by Realtor.com® is that there are expected to be fewer homes on the market, leading to fast-moving markets.

The above information, predictions, and statistics all provided by Realtor.com® (http://www.realtor.com/news/trends/top-real-estate-trends-2017/)

 

Looking forward to 2017 on a local level is best done by looking back to the numbers for the end of 2016 by St. Louis REALTORS®.  Anyone close to the housing market can tell you that November is historically a slower month in home sales, but that was far from the truth for November 2016, when home sales jumped an incredible 31%.  Comparatively, 1,438 homes sold in November 2016, while in 2015, 1,094 homes sold.  Even with strong sales, home prices remained affordable at $164,500, despite a slight increase from the previous November, when the median sales price was $150,000.  The amount of time that homes were on the market also decreased from 172 to 117 in November 2016 from November 2015.

 

According to John Gormley, St. Louis REALTORS® CEO, there are two trends that drove this jump in sales for November 2016.  St. Louis is maintaining a level of affordable housing, and buyers are also concerned about rising interest rates, driving them to take the plunge and enter the market.  “Those two drivers served as the underpinnings of our whopping double-digit home sales growth in November.  We’ve discussed the remarkable housing affordability in St. Louis throughout 2016.  Obviously, buyers have been listening and paying attention to the Federal Reserve’s public comments about raising interest rates,” says Gormley. (http://www.stlrealtors.com/wp-content/uploads/November2016HousingReportpressrelease.pdf).  As indicated by the national predictions, it is likely that these circumstances will continue driving trends for 2017, as well.

 

As for the 2017 outlook, it looks strong, but if there’s anything that November 2017 taught us, it’s that sometimes the best predictions can be wrong.  “It’s true no one knows exactly what interest rates will do in the coming year, but there’s a good bet they won’t be going down.  So, if you’ve been waiting to Buy a home, it’s time to jump off the fence as mortgage rates are expected to increase at least two or three times next year,” Gormley continues.  “What that means for buyers in St. Louis is that it’s time to engage a St. Louis REALTOR® to find your home and lock in the best rate now, so you can Buy the home you want at a price you can afford.” (http://www.stlrealtors.com/wp-content/uploads/November2016HousingReportpressrelease.pdf).

The above information, predictions, and statistics all provided by St. Louis REALTORS® (http://www.stlrealtors.com/wp-content/uploads/November2016HousingReportpressrelease.pdf)