A hyper-partisan era, a transition of power, predictions ranging from boom to bust … it can be hard to know what to expect when looking toward the future. It is best, perhaps, to take a quantitative view on the current and future state of the housing market, focusing on hard numbers and metrics.
And from this perspective, like last year, our vibrant Staten Island community continues to have a lot going for it.
This winter has been an excellent indicator of a bustling market. What is traditionally a slower time of year for real estate activity has been anything but. Right through the holidays, people continued to search for homes and multiple offers continued to be the norm. In fact, bidding wars tended to dictate the action, leaving many homebuyers frustrated on the sidelines.
Following a year of high demand and relatively low inventory, 2017 looks to continue as a “seller’s market,” at least for the first half of the year.
In mid-December 2016, the Federal Reserve indicated its confidence in the economy by raising interest rates for just the second time in a decade, and additional rate increases in 2017 are anticipated. Mortgage rates will probably accordingly inch up as a result, which may affect some buyers.
Although rising interest rates may slow the market some, the effect of rate hikes won’t be seen until later in the year; even then, it is likely sales will plateau rather than outright decline, and we might see a slight shift toward a “buyer’s market.”
Millennials will enter the market and factor large, both in buying and renting. Nationwide, the inventory of new listings in the lowest price range has been declining for the past five years, making it difficult for first-time buyers to enter the market.
With interest rates set to climb, supply will remain short, especially considering those locked in low-interest loans will likely stay put rather than look to upgrade. This combination may fuel the existing competition, at least in the early months of the year, and we will likely see continued fast movement in sales.
As the year settles out, however, we could see a decrease in price appreciation, which will restore some balance in sale prices.
Overall, Staten Island continues to offer the most affordable housing options in the city. Combine this with the new and enduring elements I discussed in last year’s forecast, and we can see that, again, trends are pointing upward for 2017.
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This information, based on New York law, was provided courtesy of The Law Office of Christopher J. Arrigali, P.C. It is intended to inform, not to advise. No one should try to interpret or apply any law without the assistance of legal counsel.