It’s all speculation about what the near future will bring for real estate brokers in 2017 but at least the speculation is from experienced real estate brokers. The Imprev Thought Leader Real Estate Confidence study finds 42 percent of real estate executives are less confident the world economy will grow in 2017.
However, the closer the outlook is to their home turf, the more their confidence is bolstered. When it comes to their state economy, 82 percent believe the economy will stay the same or improve. Getting down to the local economy, the confidence rating increases to 92 percent. At the U.S. National level, the economic confidence rating is 65 percent. The unanswered question is what effect a declining world economy will have on local economies as the year progresses? And of course, what rising interest rates will do to the real estate market?
Job Outlook for Brokers in 2017
According to U.S. Bureau of Labor Statistics data, employment for real estate agents is expected to increase 3% from 2014 to 2024, which is slower than the national average for all occupations. This slow growth is due to the state of the real estate market following recent economic downturns.
The average age of Realtors has increased over 20 years, from age 42 in 1978 to age 50 in 2000, creating a crisis of youth in the profession. Today, almost a third of brokers are 60 years old, and sixteen percent of brokers are over 60. Only 12 percent of sales agents are under the age of 35, compared to 29 percent in 1978.
The employment growth rate will likely be average even though low interest rates and tax cuts should result in more affordable housing. The retirement rate will likely be above average and the number of retiring workers should contribute to job openings. The number of job seekers will likely match the number of job openings.
Residential Price Forecast for 2017
You can expect modest home price increases in 2017. Although low inventory will continue applying upward pressure, affordability will keep prices from increasing at the rates experienced over the past few years. You should expect 2017 to bring a calmer and more normalized housing market. As long as the U.S. economy continues expanding at a slow but predictable rate, home sales should increase modestly and with slower but moderate price increases.
Appreciated values of existing homes can expect the same. The average pace of appreciation is expected to slow but should still achieve a 3 to 4 percent year-on-year gain.
But as with everything real estate, much will be based on location. These numbers are national averages. What happens at the local level is less predictable. Tier 1 cities that continue attracting new employees to high paying professions will outpace the average. However, even some of these locations are reaching an affordability plateau.
Locations not affected by tier 1 demand still face three significant challenges to both growing sales and price increases. Tight credit, limited inventory, and pressure to increase prices will interact overall to limit sales growth in some areas as well as prevent substantial price increases.
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Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.