It’s been a solid, if unspectacular year for housing, and forecasters say next year will be the best year since 2007.
Okay, that’s not saying much.
But after a crash in the number of sales, a plunge in prices, an epidemic of foreclosures and a long, painful struggle to return to health, the trajectory is at least pretty encouraging, according to a forecast by CoreLogic’s chief economist.
There are a few moving parts – mainly interest rates and demographics – but the key element is the overall economy, said Frank Nothaft. “The consensus view among economists is that economic growth will continue, and the U.S. will enter an eighth consecutive year of expansion in the second half of next year.”
More than nine years after the national housing bubble burst – a year before it popped in Atlanta – economic growth is still modest, but steady. While there are always dangers – many of them global – there is no obvious reason to expect expansion to stop.
“Most forecasts place growth at 2 and 3 percent during 2016, creating enough jobs to exert downward pressure on the national unemployment rate,” said Nothaft.
The Fed this month is expected to raise interest rates slightly. The effect will be to chill refinancing, but not dampen sales of homes, he said.
Meanwhile, the March of the Millennials will continue with the formation of about 1.25 new households – whether through marriage or just shakin’ up. That will continue to boost demand for both rentals and purchases of homes.
A separate report by CoreLogic ranks Georgia third in the nation for the number of foreclosures carried out in the past year — although the number is down substantially from previous years.
One of the largest obstacles to the housing market in metro Atlanta has been low “inventory,” that is a continued shortage of homes for sale. The number of homes listed for sale in November represented just 4.3 months of sales – a little more than half of what a healthy market is expected to have.
A year earlier – when experts were already complaining of short supply – the metro market listings represented 5.2 months of sales, according to RE/MAX of Georgia.
But November saw 3,241 closings, and that was slightly better than November of 2014, said RE/MAX, using data provided by First Multiple Listing Service.
The median sales price in metro Atlanta in November was $208,000, up from $192,900 a year ago.
“We are seeing a strong demand for homes as we make our way to the end of the year,” said Jeanette Schneider, senior vice president, RE/MAX of Georgia.