Real Estate Changes Coming to California in 2017
By: Shannon Watson •
The changes Are Coming!
After an historic recession, the U.S. economy has slowly been recovering. The picture in California shows the economy picking up at a faster rate than many other areas of the country.
California’s economy and job growth is out-pacing the rest of the country, and the housing market is following suit. The real estate market peaked in May of 2007 and crashed. It’s climbing up after an all-time low in February of 2009. Prices are still down 12% from the peak, but as rates remain attractive this may change.
Economic improvement has led to a larger demand in affordable housing as millennials leave the nest. As this sizable market force becomes informed about low down-payment options for home ownership, this expectation is reinforced. The current prediction shows a continued decrease in vacancies and unsold inventory remaining below normal levels especially in the Bay area. The California Association of Realtors agrees with this outlook in their 2017 Housing Market Forecast.
Three of the top ten areas in need of housing construction in the United States are located in California. This tight supply may push home prices up even higher.
At the height of the economic downturn, owners occupied their own homes. As the economy has grown, owners now have turned those homes into rentals. Another aspect to the market supply is the older owner. Older owners are remaining in their homes, and feel that they cannot afford to move. This has led many to speculate that owners will continue hold onto homes and children will inherit them as is the custom in Europe.
Mortgage rates remain attractive, but are expected to rise in 2017. Rate hikes may lead an eventual slowdown in 2017, but may serve as a call to action while the rates remain low.
Photo by: freepik
California, real estate, trends, 2017, housing market, realtors