Reflections of the Real Estate Market 2016

In so many ways the 2016 housing market behaved similar to the stock market as far as volatility. At the start of the year, experts anticipated an uptick in building activity, instead builders were still not producing enough homes. Overall for the year, home prices nationwide appreciated beyond expectations as mortgage rates nearly hit record lows before crossing 4.0% for the first time in two years.

In most markets, home values and prices increased every month last year (through October) with the largest gains coming in the later half with over a 5.5% increase.

Most experts say if consumer confidence remains high, and unemployment stays low, that even if mortgage rates increase slightly, we should still see strong sales growth. However, rate increases do create challenges to young first time home buyers. Hopefully, wage increases with strong economic growth will offset this.
In the month of December, the Federal Reserve increased short term interest rates between 0.50% and 0.75%. This was the second hike in 10 years. The 25 basis point move left rates low by historic standards and did not have a huge impact on mortgage rates. However, the Fed's policy makers indicated they anticipate three interest rate hikes this year. But then again, they said there would be three increases for 2016. Stay tuned!

The Sarasota/Manatee County single family home total sales year-over year as of November were up over 10.5%, and condo closed sales surpassed 4.0%.


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