DECEMBER 22, 2016 REAL ESTATE OUTLOOK CT’s housing market headed toward a ‘steady’ 2017 Hartford Business.com English: The skyline of Hartford, Connecticut, USA as seen from across the Connecticut River (Photo credit: Wikipedia)
There are several issues that will affect Greater Hartford‘s residential real estate market in 2017. Here is a breakdown of some of them: Mortgage rates: We are already experiencing modest increases in mortgages rates. If rates remain below 5 percent in 2017, unit sales and home values should be minimally impacted. Economy: Nationally, I expect a higher rate of growth in GDP provided that the Trump administration is successful, early on, in greatly reducing the ever-increasing noose of unnecessary regulations that are in effect and in implementing changes to unfavorable trade agreements. The key to economic growth is job growth. Connecticut’s economy lags behind the national growth rate and will continue to do so because of concerns over the massive deficits in the state budget and the specter of even higher taxes. Dodd-Frank regulations: It appears that there will be modifications of some of these regulations. This action will simplify the mortgage process, especially the closing portion. More importantly, more buyers will be able to qualify for a mortgage without adversely impacting the quality of the mortgages. Millennial buyers: We have been seeing more of this population group entering the homebuying market.
This trend will continue. Home values: A combination of the concerns about Connecticut’s economy, the state budget deficit and marginally higher interest rates will hold increases in home values to 2 percent or less. If rates stay around 4.5 percent, home values may increase an additional 1.5 percent. There is still a pent-up buyer demand. Foreclosures — The number of foreclosures has been falling, both nationally and in Connecticut. That trend will continue.
Buyer’s market vs seller’s market: We have been experiencing both depending on the town or city and the condition of the home. Homes that have not been updated are taking much longer to sell, whereas, some homes that have been updated and are located in preferred locations are selling above the asking price. Urban areas remain a buyer’s market.
Rental market: I continue to believe that the number of rental units, including existing and proposed, will result in an oversupply. First, our population is declining in the state. Secondly, many of the Millennials who have been deferring from homeownership and chose to rent are now looking to purchase a home. When all the factors are weighed, I believe that the real estate market will remain steady in 2017.
