There is no way to exactly predict how the real estate market will shape up for 2016, but looking at enough data could make for almost accurate predictions, just like what Svenja Gudell, new appointed chief economist of Zillow.com does, Reuters reports.
The publication conducted an interview with Gudell to find out more of what she got out from examining vast amounts of housing markets on a daily basis. She is able to tell about trends on where people want to live, the hottest markets, or what is out there for renters.
Reuters also wanted to find out what Gudell thinks will take place in the real estate market for 2016 and asked her the following:
Q: What markets do you think will be places to watch in 2016?
According to Gudell, Boise, Idaho, Salt Lake City, Utah, and Omaha, Nebraska could potentially standout due to the effects of unemployment, population growth as well as the home value growth.
She also added Denver, Seattle, Dallas/Fort Worth and Portland where inventories are declining in the last year to be hot markets in 2016 as the demand will continue to rise.
Q: Are there some areas we should just give up on, instead of waiting for them to recover from the recession?
Gudell believes that there is a city out there for everyone, and that cities will always find ways to improve and reinvent.
Q: Location always matters in real estate, but are there any adjustments to that rule in 2016?
Because of the low inventory in the cities, Gudell forecasts the surge of interest in suburbs, and first-time home buyers will look for more dense, more walkable suburbs.
Condo sales will also see an uptick specifically with first-time home buyers, as location, cost and nearby amenities are considered important factors.
Q: Now that the Federal Reserve has officially started to raise interest rates, what will the ripple effect be to the mortgage market in 2016?
The effect of the interest rates would generally be muted, according to Gudell. While some markets have already stretched, most of the markets haven't reacted much.
With continuing rate increases, there are four 25 basis point increases expected and this will be observed first at the coast in areas like Seattle, San Francisco, New York, and Miami.
Q: Is 2016 going to be the year millennials begin buying houses, now that they are older and the market is more recovered?
Gudell admits that they have predicted it last year, but didn't really quite happen. But millenials will continue to be major players in the market, trickling in going forward.
Q: What kind of new house trends are on the horizon for 2016? Are there any upgrades that are must-haves?
A growing trend among builders is building large homes in smaller lots to maximize the expensive cost of the land, says Gudell.
Q: Should we be optimistic or pessimistic or patient about housing in 2016?
Gudell says she is staying optimistic and will look past the impending hurdles and focus on the silver lining.
