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How Was Real Estate Report Card for 2015?

How Was Real Estate Report Card for 2015?

As 2015 comes to a close, it’s important to analyze the trends that shaped the housing market this year, and determine how best this information can prepare us for home buying and selling in the future. Figures released from the National Association of Realtors (NAR) provide a more extensive understanding of how new developments in the market affect different regions and demographics across the board.

Not all trends are created equal, and this is particularly relevant when discussing real estate. While some financial developments are here to stay and will eventually affect even the most remote corner of the nation, there are bumps in the road to be avoided by smart home buyers and sellers.

If you are considering a real estate purchase in the near future, having a solid grasp of the current housing market is invaluable. Examining the most recent data and its relation to previous years is essential in predicting how changes may affect your purchasing decisions in years to come.

Millennials Rising to the Challenge

millennials meetingThe 25 to 34 age group has seen a distinct boost in income, job security, and family readiness in recent years. These attributes, along with a decided loosening of the credit strings in some areas, have prompted millennials to enter the housing market with increasing enthusiasm. While this year’s numbers have shown a slow but consistent rise in home sales overall, it is the millennials who are poised to take the Walking City by storm in the near future. Boston is expected to benefit soundly from millennial home purchases over the next year.

Despite obvious progress, not all millennials are experiencing the benefits of a growing market. First time home buyers in particular have faced increasing hurdles in their journey to home ownership. Limited housing choices, barriers to financing for some applicants, and high appreciation in certain regions contributed to an 18% drop in the percentage of homes sold to first time home buyers in 2015 compared to 2010.

Yet the prognosis for millennial home purchases is mostly positive. This is especially true of the luxury housing market. While appreciation rates are on the rise, albeit somewhat slower in the northeast than in other regions, luxury homes continue to show a promising growth in sales. Nearing the end of 2015, single-family homes come in at a median price of $405,198 in the Boston area, with the overall sales rate surpassing previous expectations.

Northeast Making the Most of Growing Economy

Boston saw a boost in existing-home sales at a steady rate compared to last year, and displayed a more significant rise than preceding years. According to Forbes, most years show solid growth in home prices at approximately 3% to 5%, while 2015 numbers are closer to 6%. NAR chief economist Lawrence Yun points to the consistent year over year increases each month in 2015 as evidence of market progress.   

Millennial Buyers Home for Sale House Real Estate SignThe northeast in particular is displaying greater gains than its midwest and southern counterparts. The Pending Home Sales Index (PHSI) rose 6.8% over the last year in the northeast. The west also saw significant growth with a 10.4% increase overall. The midwest, while slightly above last year’s numbers, has shown a distinct decline in recent months, and the south showed a total decline of 1.7% from 2014. According to Yun, the steady northeast market can be partially attributed to conservative but steady home appreciation as opposed to drastic price hikes.

Opportunities Abound

Understanding the current market is vital to meeting your real estate needs. Whether you are buying, selling, or simply getting a feel for how to make the market work for you, it is important to take advantage of the information available. A basic knowledge of housing statistics and their effect on changing demographics will make all the difference when it comes to success in your real estate endeavors.  

 

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