{"id":18567,"date":"2016-01-08T14:28:43","date_gmt":"2016-01-08T19:28:43","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2016\/01\/economic-outlook-2016---barry-potoker.html"},"modified":"2017-11-08T13:46:32","modified_gmt":"2017-11-08T18:46:32","slug":"economic-outlook-2016-barry-potoker","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2016\/01\/economic-outlook-2016-barry-potoker\/","title":{"rendered":"Economic Outlook 2016 – Barry Potoker"},"content":{"rendered":"
\n
\"barry\n<\/div>\n
Barry Potoker, executive director, Saratoga Builders Association.\n<\/div>\n<\/div>\n

BY BARRY POTOKER<\/p>\n

As always, I am optimistic and bullish on the
\nfuture, especially since we live in such a special
\nplace. We are still in the midst of a recovery but
\nI will start off with some good news from this
\npast year in the housing and real estate markets.<\/p>\n

According to the Greater Capital Association
\nof Realtors from January to November, the number
\nof closed home sales increased by 10 percent
\nover the same period in 2014 and pending sales
\ncontracts in November were 19 percent higher
\nas compared with November 2014.<\/p>\n

On a national level, according to the National
\nAssociation of Realtors, existing residential home
\nsales continue to be strong. The smaller part
\nof the market, new home sales is also positive
\nalthough new home construction isn’t keeping
\nup with the demand. Based on recently released
\nhousing stats from the federal Department of
\nHousing and Urban Development, the new housing
\nmarket is on its way back and continues its
\nsteady recovery. The annual rate of November
\nhousing starts rose 10.5 percent from October.
\nThis is a terrific sign and above expectations.<\/p>\n


\nAs noted, newly constructed homes are not
\nkeeping pace with new housing demand. This
\nleads to pressures with prices creeping a little
\nhigher, which in turn puts some homes out of
\nrange for first-time home-buyers. Supply and
\ndemand along with affordability will be the key
\ntrends and indicators as we move further into
\nthis new year.<\/p>\n

According to Money magazine, home values
\nhave jumped 24 percent over the past three
\nyears, yet workers income haven’t kept pace, with
\nwages increasing only 7 percent during the same
\ntime period.<\/p>\n

Realtor.com forecasts that new home construction
\nand moderate gains in the existing
\nhome market will deliver the necessary one-two
\npunch to push total home sales to the highest
\nlevels since 2006. The 2016 housing market is
\nexpected to be a picture of moderate, but solid
\ngrowth as acceleration in existing home sales and
\nprices both slow to 3 percent year over year due
\nto higher mortgage rates, continuing tight credit
\nstandards, and lower affordability.<\/p>\n

The new construction market will see more
\nsignificant gains in the coming year as new home
\nstarts increase 12 percent year over year and new
\nhome sales grow 16 percent year over year. Total
\nsales for existing and new homes will reach 6
\nmillion for the first time since 2006.<\/p>\n

“Next year’s moderate gains in existing prices
\nand sales, versus the accelerated growth we’ve
\nseen in previous years, indicate that we are entering
\na normal, but healthy housing market,” said
\nJonathan Smoke, chief economist for Realtor.
\ncom. “The improvements we’ve seen over the
\nlast few years have enabled a recovery in the
\nexisting home market, but we still need to make
\nup ground in new construction, which we could
\nbegin to see in 2016. New home sales and starts
\nwill bring overall sales to levels we have not seen
\nsince 2006 and will help set the stage for a healthy
\nnew home market.”<\/p>\n

I thought it would be interesting and helpful
\nto understand the “who” and the “why” as to the
\npurchasing of the majority of the 6 million homes
\npredicted to be sold in 2016. According to Realtor.
\ncom, there are three distinct buyer groups;<\/p>\n

The Millennials (25-34 years old) are expected
\nto comprise the largest demographic segment
\nof buyers this year or between 30 percent plus.
\nDriven by increasing income, Millennials will
\nseek out homes that meet the needs of their
\ngrowing families, putting the most weight on the
\nsafety of the neighborhood and the quality of the
\nhome. Commute time and a preference for older
\nhomes have these buyers looking in city centers
\nand closer-in suburbs.<\/p>\n

The Gen Xers (35-44 years old) will be back
\nin the market again likely making up the second
\nlargest population of buyers in 2016 or around
\n20 percent plus. These buyers have rebounded
\nfrom the financial crisis and are entering their
\nprime family-raising and earning years. More
\nthan two-thirds of the buyers in this age group
\nalready own a home. They will be moving out
\nof a starter home into a larger home or a more
\ndesirable neighborhood.<\/p>\n

And the last large group are individuals or
\ncouples looking to relocate or retire (65-74 years
\nold). This group is expected to make up the third
\nlargest home buying segment in 2016. They will
\nbe selling their current home in an effort to
\ndownsize and lower their cost of living.<\/p>\n

Last year, they represented 14 percent of all
\nhome buyers. They will likely put their home up
\nfor sale at the start of the home-buying season in
\nMarch or April, and aim to make a home purchase
\nfollowing the sale of their home. This buyer has a
\nvery strong preference for new construction and
\nput the most weight on their ability to customize
\ntheir home.<\/p>\n

Our local building industry continues to shine
\nbrightly and continues its upswing. Just look
\naround our region and especially in Saratoga
\nCounty at the multitude of residential and commercial
\nconstruction projects going on. Real
\nestate agents and brokers, developers, builders,
\nremodelers and industry suppliers are as busy
\nas they have been over the past few years since
\nthis recovery began.<\/p>\n

The positive momentum continues and that’s
\nexciting.<\/p>\n","protected":false},"excerpt":{"rendered":"

Barry Potoker, executive director, Saratoga Builders Association. BY BARRY POTOKER As always, I am optimistic and bullish on the future, especially since we live in such a special place. We are still in the midst of a recovery but…<\/p>\n","protected":false},"author":121,"featured_media":25053,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-18567","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-outlook-2016"],"yoast_head":"\r\nEconomic Outlook 2016 - Barry Potoker - Saratoga Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2016\/01\/economic-outlook-2016-barry-potoker\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Economic Outlook 2016 - Barry Potoker - Saratoga Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"Barry Potoker, executive director, Saratoga Builders Association. 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