Redfin’s Seven Housing Predictions for 2017

Heading into 2017, Redfin data scientists and thought leaders put their heads together to predict what the housing market has in store for the new year, under a new president. The Trump administration ushers in three major policies that could significantly affect the long-term trajectory of the U.S. real estate market: infrastructure spending, tax cuts and changes to immigration policy. Next year, as these policies begin to take shape, their effect will mainly play out in new construction and mortgage rates.

Strong buyer interest, better access to credit and a modest increase in the number of homes for sale will allow home sales to grow, but not as much as in 2016. Home price growth will hold steady. Homes will sell even faster next year, breaking this year’s record as the fastest real estate market. Although growth in new construction may be hindered by new immigration policies, we still expect to see more homes built in second-tier cities and more millennial homebuyers moving from the coasts to smaller and inland markets where they can find affordable starter homes that meet their aesthetic requirements.

This tidbit caught my eyes:

In the final stretch of the 2016 housing market there have been more first-time buyers entering the market, particularly millennials aged 28-31. However, they’re not into fixer-uppers. Forty-one percent of first-time buyers surveyed by Redfin chose design quality, floor plan and finishing touches as the top features they look for in a home, surpassing other factors like green space (34 percent), length of commute (32 percent) and property taxes (15 percent). In order to get the high-end finishes and design styles they want, they’ll have to buy in more affordable cities like Raleigh, North Carolina, Austin, Texas, and North Port, Florida, which lead the country in the number of new residential building permits per 1,000 people.

“First-timers are looking for high-end features and amenities in their starter homes,” said Scott Nagel, president of real estate operations at Redfin. “Millennials especially are looking for high-quality appliances and other finishes in exchange for giving up the flexibility that comes with renting.”

So millennials would rather endure long commute but pretty design is a must-have? No more “location, location, location” for the younger crowd?

Youth is indeed wasted on the young… smh…

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Austin, Texas… ahem… can also rent out to them :grin:. Make sure appliances are stainless steel and luxury version of the brand e.g. GE Profile/ Cafe… minimum standard.

in other words, millenials continue to make bad (financial) decisions

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Good for us, baby boomers. Milk them as we retire comfortably.

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The second-tier city trend isn’t good for the long-term bay area picture. It’ll be interesting if affordability drives more people away from the bay area. Based on the migration data, households making under $150k/yr are leaving. Households over $150k/yr are moving here. I don’t think there are enough $150k/yr in the country that could move here to replace all the under $150k households leaving.

I have never heard of North Point Florida. It’s close to Sarasota, and I have heard of Sarasota. What’s good about North Point?

Won’t worry about it. The leaving of less than $150k would lead to a price decline in BA, and when it is sufficiently low, those less than $150k would return to push prices up. Unless there is a long recession, this to and fro would be short. We need to make a judgement call as to how low is sufficiently low to buy.

Not sure what millennials they surveyed, but the ones I know of would rather not buy at all than to endure long commute.

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When millennials have kids they change their attitude. .When their kids hit 4 they leave for the suburbs …