Economic Trends Condensed
Real estate market conditions are a very reliable indicator of the overarching economic climate in the United States. When home sales volume and prices are up, every other aspect of the American economy is thriving, as well.
In recent months, the U.S. has seen a much higher household formation rate, which is great news for real estate (and the economy, in general). It means that more people are getting jobs, changing lifestyles, and ultimately, have more cash to support all of this. Surprisingly, seniors are leading the way for the creation of new households right now. The baby boomers are moving out of the homes where they raised their families and upgrading to higher-end living. This is a serious driver for the luxury housing market, and it will continue to be for the next few years. Meanwhile, millennials are reluctant to enter the housing market. They saw what happened with previous generations and the overextension of credit, and they are enjoying the freedom and portability of renting.
Even so, inventory remains impossibly tight, driving prices higher (while wages lag far behind). In 2016, prices are expected to increase by 4-6% more. If you plan to buy, now is the time.