Every expert in the sector is pointing to an outrageously mismatched market come Spring 2017. Spring housing season is usually the busy time of year for real estate, mortgage, and lending; but this projection could have a very negative effect on this time of the year. Buyers aren’t going to find that perfect home on their wishlist this year if things go as planned, and lenders need to prepare for this change in the once booming housing market.

In a mismatched market a potential homebuyer will probably have to forego their wishlist and settle on something smaller or less luxurious than their original budget had allotted for. For the mortgage industry this means that we will have to become a source of education for a potential buyer and possible shift our marketing strategies. A recent report on this issue named the top ten mismatched markets in America today as follows:

● Dallas
● Houston
● Charlotte, North Carolina
● Raleigh, North Carolina
● Fort Worth, Texas
● Daytona Beach, Florida
● Greenville, South Carolina
● Grand Rapids, Michigan
● San Antonio, Texas
● Tampa-St. Petersburg, Florida

What is a Mismatched Market
A mismatched market reflects a surplus in housing that is too expensive given the current demand. In a nation where supply is exceptionally tight there are certain local markets that have been heavily developed but aren’t selling at their current price. Real estate listing site Trulia ran an analysis of online home searches finding that nationally we are lacking in starter homes and trade-up homes but sitting on a surplus of luxury listings.

This mismatched market could lead to a couple of shifts in American real estate. These local markets that are pricing their buyers out completely will see a rise in rentals if the job market remains steady. Because of these issues and steadily rising mortgage rates it is possible that the single family home market slows down immensely.

How Do Lenders Prepare
Preparation on the mortgage and lending side of these mismatched housing markets could possibly rely on a change in marketing. Aiming our marketing efforts at first time buyers could be wasted efforts in the coming season, instead we should look to more fruitful sources of capital. For example, a rising rental market in these areas will create an investment opportunity for real estate developers. This could be a possible new lead for a lender in the coming year of rising rates and unstable politics.

As with most market changes across industries, preparing for a shift will serve us better than battening down the hatches. Small shifts to our marketing programs and closing techniques in any market can help a small mortgage and lending company continue expanding despite these harder times.