The real estate market is constantly evolving and 2017 is shaping up to be another year of change. If you're planning to buy a home in the new year (or you want to sell your existing home), it doesn't hurt to know a thing or two about what's trending in the markets. As we look ahead to the new year, here's what should be on your radar with regard to the housing markets.

 

1. Home Prices May Stabilize

Home prices have been on a steady incline in recent years. But that momentum may begin to slow down in 2017. Since the Federal Reserve just raised interest rates for the first time in a year, that could have a stabilizing effect on home prices. The National Association of Realtors estimates that price growth will slow to 3.9%, down from 4.9% in 2016.

For sellers, that may lead to a shrinking profit margin in previously hot local markets. Buyers, on the other hand, may be better positioned to snag a deal on a home in areas where prices have recently skyrocketed.

 

 

2. Demand for Housing Could Heat Up

According to the National Association of Realtors, we could see an uptick in the demand for properties in 2017. Specifically, NAR is predicting that existing home sales will top 6 million in 2017, which is similar to forecasts from the Mortgage Bankers' Association, Fannie Mae and Freddie Mac.

The increased push for housing may be driven in part by a growing number of millennials who are venturing into homeownership for the first time. In addition to purchasing single-family homes, younger buyers may buy condos as well.

 

 

3. Homeowners Could See Their Equity Rise

While the National Association of Realtors is projecting a slowdown in home prices, other housing industry experts are taking a different stance. CoreLogic, for example, is forecasting a price increase of 5.2% through September 2017. If home prices increase at that rate or close to it, some homeowners could see their home equity rise.

Having more equity in your home is a plus if you're hoping to sell your home or refinance. The more equity you've built up in your property, the more you stand to make if you decide to sell your house. If you're refinancing to pull equity out of your home for a major renovation, a higher equity value will give you more borrowing power.

 

 

4. More people will move to the suburbs for affordable housing

According to Svenja Gudell, chief economist for Zillow, as home prices continue to rise, more buyers will move to the suburbs to find affordable housing.

"After the housing bust, people were able to move back to the cities because it was much cheaper than a few years ago," she said. "Now, we see people would still like to live close to the city center where they're close to amenities and in walkable neighborhoods, but for the first time they're not able to find enough inventory that's affordable for them to buy."

As a result, many people have to look further out from cities to find homes in the right price range.

This trend could be good news for suburban homeowners who are planning to put their homes on the market in 2017. For buyers, the primary advantage of choosing the suburbs over the city is the ability to stretch their budgets. For example, $325,000 may buy you a three-bedroom home in the 'burbs versus a one-bedroom studio in the city.

 

As we usher in the new year, if you plan to sell or buy a home this year, it helps to have a local professional on your side. Contact me TODAY!