“Is this a good time to buy?” Every time I ask this question to a Realtor, the answer is always the same “Yes, this is a perfect time to buy a home!” When I follow up with “Well, what about selling, is now a good time to sell my home?” I get the same answer. “Of course, it’s also a perfect time to sell!” A better question might be “How can I educate myself, and how can I create my own reliable estimate of what will happen to home prices in 2016?”\r\n\r\nFor economists and real estate analysts, the S&P Case-Shiller Index offers a trustworthy barometer of the U.S. housing market. The index lags by about three months, and thus the most recent reports refer to October 2015. That said, the data is still relevant.\r\n\r\nBased on S&P Case-Shiller Index (and also sales reports from regional housing markets), real estate analysts are forecasting that value appreciation will continue in 2016 and 2017.\r\n\r\nIt is important to note that one of the metropolitan areas tracked by the 20-city index is Greater New York, which extends to Philadelphia and the regional housing markets such as West Chester. This means that residential properties in this market are major contributors to the value appreciation reported by the Case-Shiller index in recent years, particularly with regard to single-family homes.\r\n\r\nThe year 2015 ended in a positive note for home prices in the United States. According to the closely-followed Standard & Poor’s Case–Shiller Home Price Index, the national housing market appreciated by 5.2 percent on a year-over-year basis, which means that home prices closed the year at their highest level since 2008. Furthermore, the composite Case-Shiller indices, which track residential property values in 20 major metropolitan areas of the U.S., returned to levels last seen before the bursting of the housing bubble and the Great American Recession.\r\nOne of the main drivers of this index is the fact that more housing units are being occupied in the 20-city markets, and this is directly related to job creation and the ongoing economic recovery. In 2015, the number of housing units occupied in the largest markets has increased by two million, and more than half of those occupancies represent new units.\r\n\r\nSince late 2014, home buyers have shown greater interest in new construction for a number of reasons. First of all, most of the house hunters currently in the market are first-time home buyers; this means that the allure of moving into a freshly completed property is very enticing. Real estate investors and flippers are more likely to look at existing home and distressed properties because they are not interested in occupying their acquisitions; they are mostly looking to sell quickly. First-time home buyers, on the other hand, are focused on quality of life and long-term occupancy that will yield a handsome profit in a few years.\r\n\r\nThe forecast for increased home values is another reason why home buyers are looking for new construction properties. As housing inventories become constrained due to high demand, new homes become more attractive not only to buyers but also to mortgage lenders. Demand in the rental market has also contributed to value appreciation since monthly rent payments are quickly approaching mortgage payments for new single-family homes.\r\n\r\nSo, to answer the original question… “Yes, it looks like right now is a good time to buy”. Home prices are predicted to rise in 2016 and 2017.