Real Estate Professionals often state they don’t possess a crystal ball when it comes to predicting what will manifest in future housing markets. However, we can sometimes foresee trends that emerge from past cycles that provide glimpses of things that may come! It is the sudden unforeseen events that can throw a veil over any handy crystal orb!
This month ActiveRain is hosting a contest for those of us who use the blogging platform. The contest is titled, “What is Your Prediction for 2017.”
In the spirit of the contest, I have a few thoughts floating around in the fairytale factory of my mind! They are based on what will go down in history as a very chaotic, politically charged 2016. So, buckle up! Here we go!
Although the 2016 political campaign went on for what seemed an eternity, and although it sharply divided America along party lines, the outcome of the election will likely have little to do with our local Sacramento housing market. Sacramento has experienced two years of low housing inventory, with high buyer interest. Interest rates remained low during that time.
Janet Yellen of the FED bumped up the interest rate late in 2016, by a mere quarter of a percent. Since I was first licensed as a Realtor in late 1981, when interest rates were at a historic high of 18 ½%, I have difficulty getting into much of a sweat when they are at the prolonged low rates we have seen these past several years.
Do I think interest rates will climb significantly, and put a damper on the housing market in this coming year? No, I do not! I don’t see anything on the immediate horizon that indicates the FED will rapidly increase interest rates into stratospheric realms! And, I don’t see any indication of quick solutions for the shortage of good housing inventory into our local marketplace!
One key component I do have concern about, however, dwells with future generations of homebuyers. Namely, the millennial generation, which has often found it more difficult to procure good paying jobs, while at the same time saddled with student debt. Unemployment rates have steadily recovered from 2008 highs, but salaries have not enjoyed a similar outcome.
While 2016 equates to the year of chaos, I suspect with the new president this month, we will finish 2017 as the year of unpredictability.
So, what are your predictions for 2017? I’m anxious to hear!