[fa icon="calendar"] 06.07.2016 / by Rory Williams
This time of the year is when industry experts begin to make predictions on what the next 12 months will have in store. The goal behind these predictions is to forecast upcoming trends and take the necessary steps to capitalize on them. Here are 7 Florida real estate trends to anticipate in 2016:
1. Interest Rates Will Go Up
Last December, the Federal Reserve announced that interest rates will begin to increase in 2016. Although the increase will be minimal, it looks like the plan is to raise interest rates every other quarter. Despite this, interest rates are still historically low and are expected to encourage new homebuyers to enter the housing market.
2. Home Prices Will Increase
We have already seen some home prices increase gradually, but nothing like we saw in 2007, before the market crashed. Although Florida appears to be the state with the most consistent appreciation, new construction activity is high and most builders are increasing the price of their homes for every 3 to 4 homes that are put under contract. 2016 is expected to see home prices increase by about 5% from the previous year.
3. Smarter, More Environmentally-Friendly Homes
Florida buyers are looking for homes with a lower environmental footprint. This means more efficient air conditioning and heating systems that use less energy and are more economical to operate. Programmable thermostats and controls that you can adjust on your smartphone are some of the newer features that home buyers are currently searching for.
4. More Millennials Will Buy
Florida rental properties remain in high demand and rates will continue to increase. This means that, in most cases, it will be cheaper to purchase a home and secure a steady mortgage payment than to rent. Pair this with the fact that the job market has been steadily improving, and you can see why millennials made up almost 2 billion dollars in sales last year. This trend is expected to continue in 2016.
5. Mobile Advertising
Word of mouth advertising will continue to be the best way for realtors to gain clients. An estimated 40% of prospective home buyers will ask a friend to recommend a realtor, so getting past clients to endorse you will be a key strategy. The internet will also play a big role in how buyers find and choose their agents. Google, Zillow and social media will remain hugely important in connecting realtors to past and future clients.
6. Spacious Design
Homebuyers are becoming increasingly more interested in quartz countertops because they offer a wide variety of choices, require little maintenance and resist bacterial growth. Large pantries have also becoming more popular due to consumers’ bulk purchasing habits at stores like Costco and Sam’s Club. Finally, open floor plans and dedicated home offices are a must have in 2016.
7. Moving to the Suburbs
Recent trends have shown that millennials are more interested in moving to walkable, urban neighborhoods. However, as the job market recovers, more and more young adults are leaving their first apartments to buy homes in the suburbs and start their own families. This is a trend that will continue to gain traction in 2016 as millennials between the ages of 21 and 34 become the largest group of home buyers.
A Return To “Normal”
One of the main drivers behind many of these predictions is the thought that employment rates will continue to grow and give more money to consumers. This means we will see an increase in purchases from first-time home buyers while current homeowners will be looking to upgrade. 2016 could shape up to be the best year the Florida housing market has seen since 2007.