There has been a lot of prognostications from various real estate entities about the 2017 housing market. There has also been a common tune from all sides expecting home sales and prices to moderate in the coming year. Most experts foresee a comeback for the suburbs and a slight increase in mortgage rates. However, a lot will depend on the new administration. Some of the issues that could affect the market are: immigration policies, tax reforms, infrastructure spending and regulations. Below are some forecasts that may give a hint on the market conditions to come this year.
Subtle Shift from a Sellers Market to a Buyers Market
The bidding frenzy that has been synonymous with the Bay area has cooled off. 2015 and 2016 experienced a wave of demand that led to the increase in house prices and buyers paying way above listing price just to get the house they wanted, However, the once red-hot Bay area market has cooled off in the recent months and we are now seeing houses stay a little bit longer in the market. This signals a shift and 2017 could see buyers waiting a little bit longer to enter the market so as to avoid a bidding war.
Tighter housing supplies
The housing shortage in San Francisco Bay area has come at a time when the housing demand is high. The high prices have meant that most houses have been out of reach for many buyers. This will push buyers to the inland cities where houses are still affordable, and this will reduce the number of sales slightly. If people keep migrating to peripheral cities where they can get value for their money, the house prices in San Francisco will ultimately reduce.
Smaller home-price gains
San Francisco's real estate will slow down in 2017, Zillow has predicted a moderate price increase of 1.7% compared to 4% last year. This is being viewed as a much-needed market correction after a bull trend. This will be good for the Bay Area as the market stabilizes and encourages sustainable growth. The underlying factors that support this theory such as deteriorating housing affordability and economic uncertainty will counter any growth.
Mortgage rates could increase steadily
Many experts have predicted a slight increase in mortgage rates towards the end of this year. The Mortgage Bankers Association expects the mortgage rates to stay below 4% through the first quarter of 2017 and then increase upwards of 4.4% towards the end of 2017. The increase may not have a considerable effect on home buyers and will not dent the demand. However, the rate increase will be felt in expensive markets such as San Francisco. There is also very good indication that the federal reserve will continue to raise rates in the coming year.
If you are interested in purchasing or selling a home, contact Villa Properties today at (925) 519-0794. We will help you determine the worth of your current and potential new home!