What do you think will happen with the U.S. economy over the next 12 months, in regards to builder confidence, existing home sales, housing inventory, housing starts, pending home sales and unemployment?
Liz Brooks: We have seen consistent growth in builder confidence throughout the year. A strengthening economy, continued job creation and affordable mortgage rates will keep housing healthy in 2016.
Chris Coleman: Builder confidence will continue to strengthen. Existing home sales will increase as owners become more optimistic about selling prices, and we will see an increase in housing starts. The unemployment rate may rise toward year end, but currently discouraged workers may return to the job search, and that uptick will be a good sign.
Janet Owen: I believe existing home sales will be stable. Everyone needs a roof over their head and not only is real estate a good investment, you can feel it, you can live in it or you can rent it out…it is real.
Inventory will increase because of the real estate tax situation. People who were “on the fence” about selling will probably decide to sell and that will create more supply. Hopefully demand will keep up with supply in 2016.
Even though unemployment is an important indicator of the economy, I have never relied on the reports because they never count the people who have just given up and just stopped looking for jobs; they also don’t count the people who are not in the job market and are not getting unemployment benefits.
Housing starts is a very important indicator in our economy. The statistics are available, but if you look at permits that are currently issued for housing starts next year, that will be your best indicator of housing starts in 2016.
Sean Conlon: Existing home sales will continue to improve – gradually. The best markets for sales, demand and rising prices are out West: California and Colorado are leading.
Nationally there is still an imbalance of home demand and supply which is driving prices up (there are obviously exceptions to this in specific cities). As a result, this will spark additional inventory to be started.
Unemployment nationally will continue to decrease. Locally, jobs are being created in Chicago and recently there has been an influx of employers to the area.
Rebecca Jensen: In early November, 2015 MRED home sales exceeded the entire 2014 calendar year for both dollar volume and number of transactions. I expect this marketplace to continue in northern Illinois, and for transaction volume to continue to tick upward in 2016, but at a slower pace.
The lack of inventory remains an issue for our industry, and likely the reason that increases in numbers of transactions and price appreciation are modest and will continue to be gradual at best in 2016.
Pending home sales will track to available inventory. I do expect a lengthening of time that our listings will stay in our pending status due to the TILA changes.
As 2016 is a presidential election year, I expect a relatively strong economy and low unemployment. As we have seen recently, this hasn’t had a great impact on the housing market because inventory remains the issue. So while I see a healthy job market in 2016 I’m not certain of any significant impact on the housing market in 2016.
Chris Feurer: Locally we’ll see continued growth. New construction will increase the most.
Locally, inventory will remain low. Builders can’t provide enough inventory in a short period of time. First-time buyers are still weak and that affects all sellers – it’s a chain reaction.
Jeanine McShea: We expect existing home sales to continue their upward trajectory in 2016, especially in the first seven or eight months of the year, as people who have held off on selling decide they’re finally ready to move up or, in some cases, downsize to a condo or smaller single-family home. This will help entice more first-time buyers to enter the market, but rather than buying in their mid-20s, as previous generations have done, many are holding off until their early 30s as they save up the money for a down payment.
We anticipate a very active spring market, similar to what we saw in 2014 and 2015. I think you’ll see a lot of existing homeowners wait to list their homes until after the holidays, with many homes hitting the market later in January or February. Given the low inventory and pent-up demand, we’ll once again see multiple offers that will drive up pricing.
We expect to see pending home sales go up both for existing homes and new construction. In Chicago, much of the new construction activity will be driven by downtown condo developments that are either under construction or preparing to break ground in 2016.
Leslie McDonnell: We’ll see a slight decline in home sales. This will be due to increased inventory for sellers who waited or took their homes off the market while the market cooled in the last quarter of 2015. We’ll see a slight increase in inventory, due to sluggish sales in the second half of 2015. In pending home sales, we’ll see a slight decrease, due to increased inventory.
A slight increase will be seen in unemployment, as there is quite a bit of movement in suburban corporations. For example, Kraft is relocating to the city.
David Hrobon: The bad news: housing inventory continues to be low and is predicted to get a bit worse before it gets better. This lack of options (especially in the affordable price ranges) continues to discourage some buyers from entering the market, particularly first-time homebuyers.
The good news: the lack of inventory is one of the primary drivers behind increases in property values this year. This will enable more existing homes to come on the market in the months ahead as more homeowners eliminate negative or insufficient equity. New construction activity has not yet returned to “normalized” levels but most believe builders will accelerate their pace as new household formation grows.
Unemployment and non-farm payroll numbers continue to look promising nationally. This is terrific news for loan performance and consumer confidence.