Many folks like to make predictions about what will happen in the New Year, so as we kick off 2016, I wanted to share my thoughts on where the Columbia County market is heading.
Unlike last year, the weather so far has been incredibly cooperative. This is great news for buyers, who can get out to view properties without the usual struggle against deep snow and freezing temperatures. However, while the weather is mild, the market conditions are becoming more intense.
1. The Federal Reserve and Interest Rates
The big headline as we enter 2016 is the Federal Government's decision to begin raising interest rates. After years of record lows, we are likely to see a few more small rate hikes in the coming months. This is motivating buyers to take advantage of current opportunities before borrowing becomes more expensive.
2. Shrinking Inventory and Rising Prices
As demand increases, buyers are going to find less inventory to choose from. Overall, U.S. economic conditions are improving, job growth is strengthening, and consumer confidence is high.
In our local area, I expect median home prices to rise. Sellers should find more active buyers viewing their homes than we saw last year. If you have been on the fence about listing, 2016 is shaping up to be a very strong market for sellers.
3. The Rental Market and First-Time Buyers
The rental market is also feeling the squeeze. With fewer rentals available and prices rising, more first-time homebuyers are deciding that 2016 is the year to transition from renting to owning. The math often makes more sense to build equity in a home than to keep up with rising monthly rents.
The Bottom Line
I remain very optimistic that 2016 will be a stronger year for the real estate market. While it may be a more challenging year for homebuyers due to competition and shifting rates, it represents a fantastic window for those looking to invest in their future.
