Best Places to Build
Housing Markets That Will Grow in 2017
According to experts, the overall housing market is expected to slow in 2017. In certain regions, however, unique circumstances should fuel continued growth. If you’re looking for prime destinations for your next building project, the following housing markets could offer big potential.
Certain Areas Primed for Growth
Industry insiders predict a slower 2017 housing market, due in part to increased mortgage rates and a shifting composition of home buyers. In its annual National Housing Forecast, however, Realtor.com pinpointed a few regionalized trends that point toward good opportunities for builders.
- Inventory is down by an average of 11 percent in the top metropolitan areas. According to Realtor.com’s forecast, these conditions aren’t likely to change in 2017. For builders who can locate affordable plots, there’s big opportunity for profitable sales in these markets.
- Experts forecast that millennials will continue flocking to Midwestern cities, such as Minneapolis, Des Moines, Omaha, Columbus and Madison, Wisconsin. In 2016, these specific markets saw millennial shares climb to 42 percent, which eclipsed the national average by 4 points. With good affordability in 15 of the 19 largest Midwestern markets, experts foresee continued growth in 2017.
- Western cities are expected to lead in prices and sales over the next 12 months. Price and sales increases are expected to significantly eclipse national averages in the region’s most prominent markets. Realtor.com has targeted Tucson, Portland, Sacramento, Los Angeles and Riverside, Calif. in its list of top 10 U.S. markets in 2017. The real estate website also identified Oxnard-Thousand Oaks-Ventura, Calif.; Seattle; Salt Lake City; Provo-Orem, Utah; San Diego; and Colorado Springs, Colo. in its top 25.
Other Top Builder Markets
In its recent predictions for the 10 hottest housing markets of 2017, Zillow also identified Provo, Salt Lake City, Ogden, Portland and Sacramento. Unlike Realtor.com, however, Zillow included Nashville, Knoxville and Denver among its top ten. According to the online real estate database company, as new jobs develop in smaller markets, people will continue fleeing the coast for mid-size cities in the nation’s interior.
The Effects of Limited Home Inventory
Despite what many foresee to be a moderate national housing market, regional population growth and strong local economies are expected to fuel continued growth in the country’s hottest markets. At the same time, Kiplinger’s latest forecast calls for fewer entry-level buyers due to limited inventory. According to the personal finance news and business forecasting publication, the country’s total housing inventory has declined for 18 consecutive months. This is expected to drive home prices higher, although limited lot availability could make it difficult for some builders to take advantage.
According to a recent U.S. Commerce Department’s residential sales report, permits to put up new residences declined toward the end of 2016. While not a foolproof way to assess builder activity, these statistics are considered the most reliable way of projecting the number of new homes that will be built in the months ahead. While some blame seasonal fluctuations for the decline, there hasn’t been any growth in overall new construction since the same period in 2015. This trend means pricier homes for buyers and bigger profits for sellers, especially in western markets where buyer competition is expected to be highest.
Reduce your risk with 2-10 Structural Warranties for Home Builders, become a member today!