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July 31, 2016

3 Buyer Types to Watch for in 2016

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3 Buyer Types to Watch for in 2016

Three key trends are expected to drive many real estate markets in 2016: The growth in communities geared for those 55-plus, new-home construction, and a return of first-time home buyers, according to a recent ERA Real Estate broker survey report. 

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“Looking at industry forecasts, I believe the economy will continue steady progress forward and housing will play an important role,” says Charlie Young, CEO of ERA Real Estate. “Our ERA brokers across the country are telling us that first-time home buyers are making a comeback, the move-up market is being fueled by recent price appreciation and, while still challenged, new construction is beginning to increase to meet demand.” 

ERA’s survey points to these three growing buying segments in 2016:

1. 55-plus communities: By 2019, nearly 45 percent of U.S. households will be headed by someone who is at least 55 years old or older.

“When thinking about baby boomers, it’s important to understand that they may be willing to relocate, but they are not willing to sacrifice their active lifestyles or proximity to family and friends,” says Young. “Also, don’t assume they are downsizing. Many choose homes of similar size and price but that offer more of lifestyle offerings.” 

2. New-home buyers: Markets like Florida, California, Utah, Georgia, and New York are seeing an uptick in new construction and growing interest in land purchases. “New home starts are on the rise thanks to loosening of lending or developers,” says Young. “However, new home starts are not keeping up with demand, so increased land purchases may be related to private custom home builds.” 

3. First-time home buyers: Also expected to fuel the 2016 market, first-time home buyers are forecasted to make a comeback. As home values rise, move-up buyers will cash out and make their next move, which will add more entry-level inventory to the market. Also, an increase in new-home construction this year is expected to add to the inventory for entry-level buyers too. 

Source: “2016 Industry Trends: More First Timers and Boomers Buying,” RISMedia (Jan. 6, 2016)