Four Reasons Why 2017 Will Be A Great Year For Luxury Real Estate
1. The U.S. economy continues to expand; unemployment continues to decline.
The April 2017 unemployment rate dropped to 4.4% according to the Bureau of Labor Statistics. This bodes well for the real estate market, as more buyers are gainfully employed, they will be purchasing their first home, which allows sellers to leverage their equity and move up into larger homes in more prestigious areas.
2 Mortgage rates still remain at record lows!
“Despite the expected increase to interest rates, the 30-year mortgage rate in the first week of may 2017 fell 1 basis point to 4.02 percent," says Sean Beckett, Freddie Mac's chief economist. Lower interest rates give buyers greater buying power since lower rates reduce monthly payments. These lower costs are a boost to buyers and are a boon to sellers!
3. Consumer confidence is up!
"Consumer confidence still remains at strong levels," said Lynn Franco, Director of Economic Indicators at the Conference Board. Buyers have been very cautious and have tended to wait until they felt the real estate market has stabilized. With a sense the economy is growing and the potential for interest rates to creep up this year, buyers aren’t waiting any longer to get into the housing market.
4. Inventory is shrinking! The amount of homes available for sale is diminishing.
Currently in the Southern California Real Estate market, there is less than a 2.5 half months supply of homes available for sale, down from over 3.1 months supply last year! Many homes that are being listed are selling in a short period of time, some above asking price. It’s simple supply & demand; as more buyers move into the market, and fewer homes are available for sale, prices move up. Even homes in original condition are selling at a quick pace!
Prestige Neighborhoods in the Greater Long Beach Area
The Long Beach market area is a very diverse real estate market. While some of the best values in coastal property can be found in the greater Long Beach area, Long Beach & Lakewood are home to several prestige neighborhoods. These include: Naples Island, Belmont Shore & Park, Belmont Heights, Bixby Knolls, Virginia Country Club, Park Estates, and in the city of Lakewood, Lakewood Country Club.
What Luxury Home Buyers will be Looking for 2017
While we will continue to see growth in the luxury real estate market segment, buyers will increasingly be looking for value in their purchases. Location will remain a top priority for many buyers. Condition of the home will be another top selling point for most buyers. With continued low interest rates, buyers will look to leverage their buying power and focus on homes that have been upgraded. Sellers with fully upgraded homes in the prestige markets can expect to sell at a premium. Homes in original condition will sell closer to the norm of just below their original asking price.