Market Predictions 2017
All real estate is local but market predictions are always interesting. The ups and downs of a market are very specific to where in the USA it is located. However, there are national trends that can be seen and used as a guide for what to expect in the real estate market this year.
For instance, we expect to see more homes sold in 2017 than in 2016, with slightly higher interest rates (perhaps up a ½ percentage point), and with a 3 to 4% higher cost than last year. Appreciation last year was about 5 -6%.
As much as we love to see the value of our home increase, we don’t want to see that change year to year too greatly. We have all had our fill of rapid home price increases, and subsequent rapid value decreases. So a gentle uptick is pretty comforting these days when most of us consider our home to be our largest financial asset.
However, we do have inventory woes. Despite increasing home values, many homeowners are not eager to sell. Because of the lack of replacement inventory, the high price of that replacement inventory and the fact that so many homeowners just refinanced their homes and plan to stay put longer, our inventory is very low right now. For instance, in February 2016, there were 961 single family homes (all types) listed in San Luis Obispo County. In February 2017 there were 717 homes listed. That’s big drop in available homes.
More people want to live here. But during the recession only a handful of homes were constructed. The City of Paso Robles once had a moratorium on the number building permits that could be issued each year. Now they are lauding any new construction that is coming online.
When we have more buyers than sellers, the existing inventory sells more quickly and at a higher price. Prices will naturally increase. It’s not real estate agents who drive the market, it is the market that drives the market. And 2017 looks like it will be a driven market.
I was recently searching for an investment property for a client and in Paso Robles, between $300 and $400,000 I only had 10 properties for her to even consider. After reviewing the inventory, there was only one she was interested in viewing. Now we are in a “let’s see what comes up next” mode. In fact, I have 2 or 3 clients in the same boat. We are actively waiting and searching for what they want.
My market predictions say that it will be an interesting market this year. Very often the Spring is the busiest season, but with the afore mentioned statistics, the entire year may be strong to the end.
If you plan to purchase or sell this year, it is best to contact your real estate agent (hopefully me) now. Planning ahead will be your best strategy!
And Always Expect the Best!!