Last year (2016) the real estate market did extremely well; home values, prices, and sales presented the strongest numbers seen since before the market went down a few years ago, it is now 2017. We are days away from a major political change, within our government but what does that mean for the housing market? Typically, a transition of power (during an election year) has very little effect on the housing market in and around DC; however, this year it could be different.
A majority of the time when there is an administration change the individuals involved are already in DC. There is a passing of batons as their roles change but the market does not change, as no one is moving into or out of the area. With the President Elect his staff and administration are not part of the political world, currently residing in DC. The administration will be moving from other areas into the DC area, which will most likely effect the housing market. At the same time, there may be increased home sales as long time political affiliates choose to move away from DC; as they are no longer involved in the daily political scene.
People need a place to live no matter who they work for and it will either be through rentals or buying. Either way the influx of buyers and sellers will be positive for the DC/MD/VA communities and the surrounding housing market.
In December, interest rates did rise approximately a ½ a percent but it was expected, as interest rates had been very low for a long time. The Federal Reserve might wait further into 2017 before they raise interest rates again to see how the “chips fall” (in regards to the economy) as the new President begins to lay out his policies. An interest rate hike will affect the housing market more than anything as people will be able to afford less the higher the interest rates are.
Economists expect home appreciation to continue. There may be a slight slowdown as the economy settles over the next 100 days but it will not abruptly stop.
Home prices will increase, if inventory remains low and if there is an increase of buyers. The price increase will be positive for Sellers; however, in combination with interest rate hikes could make purchasing difficult for the middle class. Additionally, Rents have been increasing at a record pace, which will push those long-term renters into purchasing (as a mortgage is now cheaper than renting).
The changes coming to the housing market this year look to be positive for both buyer and seller; however, it also means that one should buy sooner rather than later. Interest Rates are going to increase and it will affect the buying power of many individuals. Home prices are not at their peak but are still strong, which is good for sellers.
No matter who is President or President-Elect the simple fact of change will have an effect on the economy but it will not impact the market immediately. If you are on the fence regarding buying/selling contact your real estate agent. They can provide you with valuable information to help guide you towards the best decision for you.
Happy House Hunting!!
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