2017 Real Estate Market is expected to be Strong

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2017 Real Estate Market is expected to be Strong

According to a survey conducted by MBA (Mortgage Bankers Association), it is found that on the top of multifamily mortgage origination and commercial firms, US multifamily mortgage and commercials lending to be expected to get increased in 2017, as the lender's appetite to the place new loan and borrower appetites to borrow both the remain strong.

 

Around ⅔ (63%) of top firms are expected to be origination to increase in year 2017, with one quarter (26%) is expected to get increase of 5 % or more than that. A full half loke 50% expect their own firm origination to get increased by 5% or more.



Jamie Woodwell,Vice President for Commercial Real Estate Research, MBA said that commercial mortgage bankers expect 2017 to carry much more of momentum from 2016. Most of top firms expect strong demand from the both borrowers and lenders in 2017, although it is not quite that as strong as in 2016. Originators mostly see that volume of lending and borrowing growing slightly, with over half expecting the potential regulatory and the legislative changes to be the positive for market. This survey paints that expectations of steady and strong market in year 2017.

 

Specification of  2017 report finding  include:

 

  • Lenders will remain eager to make the loans - 96% of originators reports show that in year 2016 lenders had very strong appetite to make the new loans and 77 % expect lenders 2017 appetite to be very very strong.

  • Borrowers are much more eager to take out the loans - 80% of the originators report that in 2016 borrowers had very strong appetite to take out the new loans and 69% expect borrowers 2017 appetite to be very very strong.

  • 92% of the originators report that in 2016 the firm which they own has a very strong appetite to make the new loans. A slight low share i.e 85% expect their own firm 2017 appetite to be very strong.

  • Most of the originators expect that the growth of market in 2017 is one quarter of respondents i.e 26% expect the total market originations to increase the 5% or more in 2017. 50% expect that their own origination to get increase by 5% or more.

  • Loan returns are expected to be increased in 2017. Half of the respondents characterized loans made in 2016 as very low return. Less than the one third i.e 30% expect loans to be very low return in 2017.

  • Loan risk is expected to be increased slightly in 2017. More of the respondents characterized loans made in 2016 as a low risk than as comparative to a high risk. In 2017, most of the respondents expect loans to be at medium risk i.e 53% with reminder evenly split between seeing lower and higher risk loans.

  • Majority of the respondents i.e 53% expect potential regulatory and the legislative changes that could be the positive for market. One in four respondents anticipate neutral impact and one in five see the potential negative impacts.

  • Among top reasons cited for the positive impacts which were potential changes to Dodd Frank rules particularly at risk retention and more of the positive economic climate. Among all these reasons cited for the negative impacts which were uncertainties which could be caused by the changing rules.


Allen Hill - About the Author:

Allen has done Masters in Business Administration and has great knowledge of real estate sector.