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Start of 2016 Housing Market Report

As I am going over the data for 2015 and reading up on forecasts for 2016, the trend is clear. People are buying homes again, and this trend looks to continue to grow stronger over the next year.

As we look back over the last year, we started in January with a 1.1% decrease in closed sales compared to the same period of the previous year, but by June of 2015 closed sales had increased to a 7.3% increase over sply (same period last year). The last published report by MIBOR puts that increase now up to 8.6% over the previous year and a pending sales increase of 11%.

Current theories about the significant gap between closing and pending sales relates to new mortgage closing rules which has slowed the process by about two weeks. Adjusting for that the trend not only continued into the traditional slow period for real estate, but actually accelerated.

This trend was further supported by an increase in median sales price of 4.6% averaged for a rolling 12 months.

The only negative in all of this is that new listings at only 3.8% growth over the last year are not keeping pace with closed sales, and inventory continues to dwindle.

If you are considering selling a home this is great news though.

That is because not only are the buyers on the prowl, but with increased prices and a dwindling inventory; you have a much greater potential for your home to sell in a short period of time AND for the market price should be much more appealing than in years past. (You know, when you decided not to sell)

If you are a buyer, don’t fret.

Given these trends, the spring of 2016 should start to see MANY more homes hit the market, and this will give you many homes to choose from and over time (depending on how many sellers enter this strong market) the market should start to balance out.

Given that most prognosticators are looking for a 3-5% increase in average home price over the next year, and the Federal Reserve has begun raising the overnight rates for banks (This does not directly affect mortgage rates but it will have an indirect impact on them and will affect the amount of money that is being actively loaned out) buyers are still in a bit of a sweet spot as “money is cheap” for the time being and they currently have the opportunity to buy a home at the beginning of a market upswing rather than waiting to see how high prices go before the markets turn at the end of this cycle.

The long and the short of it is we expect to see a lot of activity in the housing markets this year, and we look forward to helping you whichever side of the table you will be sitting on.

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