It May Not Be Obvious, But…

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It May Not Be Obvious, But…

LIV Sotheby’s International Realty downtown managing broker, Steve BlankThousands of homes are sold during both Republican and Democratic administrations. No matter who lives in the White House, or what party controls the House and Senate, the housing market will be based on individual wants, needs, and capabilities. Although we have fixated on politics, it is primarily economic factors driving the real estate market heading into 2017. Make no mistake, 2017 will be viewed differently when assessing its predictability.

We are heading into this era with strong employment, rising salaries, still very low interest rates, and a shortage of inventory (nationally and locally). Job growth is the best indicator to determine the strength of the housing market. The national unemployment rate continues to hover around 4.7%, while Denver continues to enjoy well below 4% unemployment with legitimate optimism. Amazing interest rates are still in play, but likely to rise a half to a full point by year end.

The housing market thanks Baby Boomers and Millenials for the increased real estate momentum. Baby Boomers (empty nesters) have been and will be making lifestyle changes as they get closer to retirement. Millenials do not see interest rates as a driving factor in purchasing a home. They view ownership as the best path to building personal wealth and stability for the future, not to mention they are tired of paying increased rents. One challenge for home buyers in higher demand cities (including Denver) is how can they best compete with other buyers. It can be challenging to locate the right home in markets where there is a shortage of available inventory. A great strategy for positioning yourself to compete is becoming “buyer ready”. Meaning to become preapproved by a respected mortgage lender, or of course defining your ability to be a cash buyer.

The next portion of this article should not be viewed as political, but it gives focus to the business aspects of the new administration, as it pertains to housing. No one is expecting this administration to be without issues in the future, however, President Trump made his fortune in real estate and understands the vital role it plays in healing the economy.

Interest rates will gradually continue to move north, and the job growth of any local economy will usually dictate the health of that area (Denver looks well positioned). And appreciation shall continue to increase, albeit at a more reasonable pace for 2017. Rates will be a little higher, but mortgage money will be plentiful and with less government regulation involved. This administration may also remove obstacles with tax breaks and more incentives, while limiting regulations, helping both builder and consumer costs (an estimated 25% of the cost to build a home is regulation and fees). Of course if President Trump is rebuilding our country’s infrastructure (bridges, roads, etc.) it may create a labor shortage at some point thus increasing the cost of construction in general!

Just stay informed. It is so important to locate a seasoned real estate professional who has the experience, good strategies and the tools for success, whether buying, selling or both. Those brokers are worth their weight in gold, helping you to read a changing market.

For more information, contact LIV Sotheby’s International Realty downtown managing broker, Steve Blank, at 303.520.5558. To service all of your real estate needs visit www.livsothebysrealty.com.

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