Home Prices To Even Out in 2016

home prices Whether you are a homeowner contemplating selling your home or a hopeful buyer-to-be wondering if now is a good time to take the plunge, it’s important to stay up to date on the changes in the U.S. housing industry as well as the local metro Atlanta market. Read on to learn what experts are projecting for home prices in the coming year.

Price growth balances in 2016

According to a report from Bank of America Merrill Lynch, U.S. home prices are poised to even out after years of roller coaster activity. Home prices in the U.S. peaked in 2006, and in 2008 the bubble burst, with home prices falling drastically for the next few years. In 2012, the market started to rebound as prices rose steadily. Home prices continued to rise due to housing supply shortages, causing concern from economists that over-valued homes were outpacing income growth, further exacerbating the situation.

home price overvaluation Currently, U.S. homes are 12% above “fair value” estimates based on average income. Compare that to 2006, when U.S. homes were 59% over fair value level and it’s evident that there has been a lot of change. Now, it looks like home prices will be stabilizing in 2016, with prices rising just 3% annually in the next year or two, and rising about 1% a year over the course of the next several years.

Post-crisis mortgage regulations in action

According to the authors of the Bank of America Merrill Lynch report, the regulatory measures created after the catastrophic 2008 bubble bust are doing their job. Those regulations designed to prevent another subprime lending bubble are expected to keep home prices fairly consistent from 2016 to 2022. A rate of 1% growth in sales prices per year is expected in the upcoming eight year period, compared to 5% this year.

In any market, having an experienced real estate agent on your side can make all the difference. Contact The Premier Group today to discuss how we can help you achieve your real estate goals in Woodstock, Towne Lake, Cherokee County, and throughout metro Atlanta.