2017 Willamette Valley Real Estate Market
Associates and Friends,
This year’s forecast was challenging! We researched multiple sources, talked with designers, home builders, developers, banks, and home buyers. Significant economic changes are ahead due to the new business friendly administration.
Home sales for 2017
Sales will be up, perhaps as much as 10%, as the aging population begins to downsize, and the "millennial" buyers continue moving into home ownership. As optimism about the economy increases, more land development will begin, as risk declines, bringing more buildable land to market. New home sales will be good through 2017. Migration to Oregon will continue. Last year, 15% of sales in Salem were from out of state. This month alone, we have received 12 referrals from out of state Coldwell Banker offices. We expect that number to increase to 20% next year.
Home price increase will be around 5% in 2017, while interest rates will remain around 4%.
Home prices increased 7.5% this year. As prices go higher, annual increases will moderate.
NEW HOME TRENDS
FORGET THE STARTER!
Millennials have put off buying by as much as 10 years versus the boomer generation. They are more focused on establishing careers and saving for a down payment. They view a home as a lifestyle rather than a means to make money. When millennials buy, they want the move-up home, because they plan to live there for at least 10 years. Therefore, they are more demanding in home appearance and amenities.
Toll Brothers, one of the leading luxury home builders, report that 84% of all millennial buyers want soaking tubs in the master, the biggest in kitchen appliances, fireplaces, full tile baths, and natural, renewable fibers, woods and stone. Dark color accents are back in and cork is making a reappearance. Open floor plans are declining in favor of more private space, confined rooms, and accents on "privacy”. 220v plugs in the garage, as 60% of buyers think they will be driving an electric car with-in 48 months.
That trend continues. LUXURY is more important than "space". Lower heating costs, lower furnishing costs, less cleaning time, and lower taxes are all sited as reasons. Cozy and warm, versus big and cold is the trend. Plus, keeping the sales price within the budgets of many. Many do not believe they will see big price increases in value of homes, so they are concerned with how much of their budget goes to a home versus savings and investing.
Nothing but good news for housing next year. The positive business environment leads to increased job creation, which in turn leads to better home sales.
All the best in the coming New Year!