It’s the question I get every year, without fail: “What’s the Real Estate market going to be like this year?” Although we can never be certain, with a little research, bit of educated guesswork, and my handy crystal ball, I’ve come up with the top 7 predictions for the local real estate market for 2017. Here’s what you can expect to see: 1) Millennials Stepping Up
Despite the articles stating that Millennials didn't want the same things their parents wanted; marriage, kids, and home ownership, they are growing up and, according to Zillow represent 50% of home buyers.
They realize that it's cheaper to buy than rent in many cases, and that home ownership can be a key to wealth building.
2) Boomers Down Sizing (or Right Sizing)
The Baby Boomers are now between 53 and 71 years old, with many retiring or getting close to it. According to a National Association of Realtors survey, 71% of homeowners over the age of 55 have not moved since 1999. 36% have stated they are planning to move.
We expect to see them taking advantage of their equity, seeking an easier lifestyle, and getting closer to cities, amenities, family and friends. Others will head for semi-rural areas such as the Sierra Foothills east of Sacramento, where they can get more land and space, and still be close to amenities.
Whatever the case, many will be selling, and choosing homes that are the right size for their changing lifestyles.
3) Bay Area Residents Cashing in and Heading Out
San Francisco Bay Area residents of all ages seem to be getting tired of the cost, crime and crowding they deal with on a daily basis.
According to a poll by the Bay Area Council, 1 out of 3 residents surveyed said they are considering leaving.
The median home price in communities from Santa Clara to San Francisco is over $1Million, and the INRIX traffic scorecard rates the Bay Area as having the 3rd worst commute in the country.
FBI data shows that San Francisco has the highest property crime rate in the nation, and also has the highest percentage of homeless residents as well.
Home owners waiting for the right time to pull the trigger may decide that 2017 is it.
4) Sacramento Gets Hotter
Realtor.com’s economic research has revealed that Sacramento is the 4th hottest housing market in the country, only trailing Boston, Phoenix and Los Angeles. It is the only city to make the top 5 both this year and last.
The Bay Area Council reported that nearly 9% of residents leaving the Bay Area move to the Sacramento Region.
Sacramento area houses generally go for less than half of comparable properties in the Bay Area, and the word is out.
5) Folsom Will be Even Hotter Folsom homes sell for more per square foot than any city in the region, though still half of Bay Area prices.
Checking Folsom Homes for sale, we find that there are only 64 homes for sale currently on the market, though this is typically the slowest time of year, with inventory peaking in late summer. Even so, at the peak last summer, there were 183 homes on the market, compared with 561 during the housing crisis.
With the demand high and supply low, prices should see moderate increases. How moderate? I’ve heard experts toss around 4% to 7%. Folsom saw an 8% increase from 2015 to 2016.
6) Multiple Offers Become the Norm, IF the House is Price Right
54% of last year’s home buyers made offers on more than one home, with 24% making three or more. With tight inventory, expect more of the same, this year.
Of my last 2 listings, I had 4 offers on one and 6 on another, with frequent calls coming in after we were already in contract. One of my colleagues had 15 offers on her last listing.
Regardless if it’s a condo or a palace, if it is priced right, expect multiple offers.
If you’re buying, when you find a house you love, be prepared to write your best, strongest offer. You may not get a second chance.
7) Interest Rates Could be a Game Changer
All of these predictions can get kicked to the curb if there is a significant increase in rates. Kiplingers predicted a couple of weeks ago that conventional mortgage rates would be at 4.6% by the end of 2017, but they were at 4.05% at the time. Since then, we’re at about 4.37%.
Even at 5%, it will still be cheaper to buy than rent in many markets, and 4.6% is still a relative bargain, but if rates go much higher, there could be a pull-pack on purchasing, causing home prices to stall.
What do you think? Will my predictions come true? Did I miss anything?
Full article here: http://www.myfolsom....-estate-market/