Real Estate

GMU Economic Professor Stephen Fuller Issues Bullish Report on DC Real Estate Thru 2016

A generally positive assessment was given by George Mason University economic Stephen Fuller on March 21. Pent-up demand for housing, increased consumer confidence in the economy and anticipated rising interest rates were all noted as factors driving the market through 2016.

Fuller noted that mortgage interest rates are forecasted to rise to 5% in 2015. Current levels are around 4.32%. “While these rates remain low by historic standards, they will seem high to younger buyers and should motivate them to make their move on home ownership sooner rather than later to lock in a lower rate as they slowly increase in 2014 and 2015,” he said.

This does create potential problems in inventory in the DC market as rates rise. “There are a great deal of DC area homeowners who refinanced at rates below 4%,” said Gerard DiRuggiero, Principal Broker at UrbanLand Company. “This may reduce resale inventory during the rise; homeowners tend to want to stay in their homes when financed at such a low relative interest rate.”

Inventory problems in the resale markets can spur growth in the new home and new condo sector. Fuller also forecasted double-digit growth in new residential construction through 2016.

“We’re already showing most of our actively searching condo buyers a mix of resale and brand new units,” continued DiRuggiero. “In a hyperactive, highly competitive market such as we’re facing today, it’s essential to look at all options. If resale inventory drops during a rise in rates, we’re certain that more of our buyers will start to choose our brand new condo options.”

Fuller made his remarks for the sixth annual spring housing briefing presented by Apex Home Loans, a Rockville-based independent mortgage banking firm.

UrbanLand Company is a downtown D.C. based private real estate brokerage serving consumers, real estate investors and developers in DC, Maryland and Virginia.

Call 202.299.9223 for immediate assistance or email if you require help with your DC/MD/VA real estate needs.

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