2017 Real Estate Forecast

Published: Nov. 22, 2016, 5:02 p.m.

b"With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
More of the same is not always a bad thing, and heading into 2017, Terry Story sees the real estate market continuing along its present path\\u2014low inventory and high prices. Both of these factors affect baby boomers and the elderly who hope to sell and downsize and young people with limited funds looking to move into their first home.
Many millennials have little option other than renting and, even though rental construction has been ramped up, the price of rentals still outpaces income which creates a conundrum if you\\u2019re trying to save for a down payment.
Rise and fall of interest rates
Terry says that if interest rates rise, which they are expected to do by the New Year, that increase coupled with housing and rental prices will create a double squeeze making monthly payments less affordable for most people.
Will self-correction save the day?
If prices remain too high, then buyers will stay away, houses won\\u2019t sell, inventory will rise, and prices will soften.
This is the way markets self-correct and is something to think about, says Terry. \\u201cIt\\u2019s the interesting dynamics of working with a free marketplace.\\xa0 It's good.\\xa0 It's the way markets self-correct.\\u201d

Cycles generally run in 10-12 year segments, and we\\u2019re now coming up to the end of one and the beginning of another. Regardless of the political or economic climate, we should begin seeing shifts and adjustments in certain areas.
Terry says a demographic shift is already occurring with the urbanization of the suburbs. Since housing prices have pushed many people to settle for living in communities outside of the city centers, shopping malls, restaurants, movie theatres, and other establishments common to urban centers are opening up in these areas.
Commercial real estate vs online shopping
Online shopping with free shipping and easy returns signals some warnings for many brick and mortar businesses. A case in point is Macy\\u2019s who this year announced the closure of a sizable number of its stores due to online purchasing. Expect to see some changes in the types of businesses occupying space in major retail centers\\u2014health clubs and gyms and restaurants, for example."