With 2016 behind us we can begin to look towards 2017 and what may occur in the market this year. Although the 2016 final numbers have not been compiled yet, we do have data from January through November 2016. Comparing those numbers to the numbers from January through November 2015 reveals that:
- 19.03% more homes sold in 2016 than 2015
- Average Sales Price remained steady at approximately $248,000
- Homes Sold 14.36% faster (111 Days on Market as opposed to 95)
These numbers indicate that the market is beginning to favor sellers somewhat. Typically homes are selling for a higher percentage of their list price and in less time. Buyers also have less to choose from because homes are selling more quickly. While the market varies by price range (homes priced less than $250,000 are selling much more quickly than those price over $400,000), in general the market continues to recover from the mortgage meltdown as shown in the graph below:
The earliest data point in this graph is the average sales price at the end of 1996 ($139,639). Real Estate appreciates, on average, about 4% per year in the US. The green line represents 4% appreciation each year since 1996. The red line represents the actual Average Sales Price each year since 1996. From 2003 to 2004 the average sales price increased approximately 13.5% and approximately 20% from 2004 to 2005, vastly outpacing the 4% average. Prices peaked in 2007 and the real estate “bubble” is the time period from 2003 through 2009 during which the red line is above the green line.
The real estate market is currently recovering and the red line is below the green line. As the green line grows closer to the red line, the market gets closer and closer to true “recovery.” While no one knows exactly when the market will have recovered from the “bubble,” rising interest rates, changes in the economy and legislative changes that may occur in 2017 will markedly impact how quickly the market recovers. For an interesting comparison, CLICK HERE to read a market review from a few years ago.
Stay tuned for our monthly market update video and more news about the final numbers for 2016. If we can help you with your real estate needs in any way, please call or email!