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2016 Housing Forecast

December 14th, 2015 | by: Lauren Biedenharn

Realtor.com has come out with a report on their predictions for this upcoming year in the housing market and trends. They say that Millennials, Gen X’ers and retirees will account for the majority of the predicted 6 million homes sold in 2016.

In the past we have seen builders working on the luxury market with better margins for their projects, but this trend is about to change. With a correction in the market, is seems builders are now going to focus their projects on homes with a more affordable price tag. This new trend will hopefully bring in Millennial-buyers, which have not had a strong presence in the housing market so far.  If predicted there are 6 million sales (of new and existing homes) in 2016 it would be the first time to hit that number since 2006. This would be due to “strong gross domestic product increase of 2.5 percent and continued job creation”.

The three main groups of homebuyers for this 6 million sales goal are Millennials, young Gen X’ers and retirees.

 

Millennials: Even though this group is not a big part of the homebuyers market right now, they are predicted to be the largest demographic in 2016. “Driven by increasing income, Millennials will seek out homes that meet the needs of their growing families”. These needs are changing with new generational trends such as commute time, safe neighborhoods, close proximity to shops and restaurants within their lifestyle. According to Realtor.com the most sought after markets will be:

1.    Atlanta-Sandy Springs-Roswell, Ga.

2.    Pittsburgh

3.    Memphis, Tenn.-Miss.-Ark.

4.    Boston-Cambridge-Newton, Mass.-N.H.

5.    Austin-Round Rock, Texas

 

Young Gen-X’ers: “After being 20 percent of home purchases in 2015, this demographics will be back in the market again likely making up the second largest population of buyers in 2016”. This group has not only rebounded from the financial crisis but is entering their prime family-raising and earning years. This means Gen X’ers will be making more money, and most likely moving into larger homes to accommodate their growing family. According to Realtor.com the most sought after markets will be:

1.    Atlanta-Sandy Springs-Roswell, Ga.

2.    Denver-Aurora-Lakewood, Colo.

3.    St. Louis, Mo-Ill.

4.    Charlotte-Concord-Gastonia, N.C.-S.C.

5.    Columbus, Ohio

          

Retirees: Expected to make up the third largest home buying segment in 2016, this group will be “selling their current home in an effort to downsize and lower their cost of living”.  This demographic will be looking for homes that are smaller, easier to manage, and closer shopping and amenities. They also will be looking for neighborhoods that attract other retirees and their lifestyle. According to Realtor.com the most sought after markets will be:

 

1.    Boston-Cambridge-Newton, Mass.-N.H.

2.    Sacramento--Roseville--Arden-Arcade, Calif

3.    San Diego-Carlsbad, Calif.

4.    North Port-Sarasota-Bradenton, Fla.

5.    Cape Coral-Fort Myers, Fla.

 

Top 10 growth markets: Realtor.com has also predicted “several markets that poise for substantial growth in prices and sales. Each market demonstrates strong demand dynamics, evidenced by 60 percent more listing page views on their site. Surging demand in each market can be attributed to growing household formation, a prosperous job market, and low unemployment rates as well as large populations of Millennials, young Gen X’ers and retirees”. These 10 hottest markets for 2016 are:

 

1.       Providence-Warwick, RI-Mass.

      6.     New Orleans-Metairie, La.

2.       St. Louis, Mo.-Ill.

      7.     Memphis, Tenn.-Miss.-Ark.

3.       San Diego-Carlsbad, Calif.

      8.     Charlotte-Concord-Gastonia, N.C.-S.C.

4.       Sacramento--Roseville--Arden-Arcade, Calif.

      9.     Virginia Beach-Norfolk-Newport News, Va.-N.C.

5.       Atlanta-Sandy Springs-Roswell, Ga.

     10.    Boston-Cambridge-Newton, Mass.-N.H.

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