As you probably know Praful Thakkar has authored a contest titled "Get Out Your Crystal Balls: What is your prediction for 2017" I don't own a crystal ball and I think I sold my Magic 8 ball at a yard sale a few years ago. Anyway -- here goes.
Looking back at 2016 it was a pretty good year for the valley's housing market.
It wasn't a record breaker but it was improved over the 2015 market in almost every area and every price category.
Prices rose throughout the valley and depending upon what area and price point you were interested in the improvement could have been as much as 9+% for the year.
Lower priced homes (150,000 or less) were gobbled up at a furious pace as demand overwhelmed supply.
And while demand wasn't all that robust the supply of single family resale homes was even weaker so the market maintained a sellers bias.
But enough about 2016 it's gone and 2017 is here. So what do I think is in store for our valley's housing market for the rest of this year? Well, I'm cautiously bullish.
There was a lot of worried hand wringing by some agents towards the end of 2016 as the Federal Reserve let it be known that an interest rate hike was on the way and depending on how the economy performs there could be two or three more.
I don't believe that an increase in mortgage rates will dampen housing starts or existing home sales. One of the reasons is the easing of lending guidelines.
Higher interest rates means you can't buy as much home as you could at the lower rate. But restrictive lending guidelines means you can't buy a home, period.
60% of the homes I sold last year were to cash buyers. I believe that percentage will drop pretty dramatically this year.
We don't need anymore buyers to see an increase in home sales if more buyers in the existing pool are able to get loans.
And while I don't want to talk politics there is a feeling that the economy is poised to improve and that optimism, along with some actual growth, has caused the stock market to rise following the election and that will be good for luxury and second home sales.
As I said, I'm cautiously optimistic. If the President Elect makes good on his promises of job creation, lower taxes for the middle class, the repatriation of corporate capitol parked off shore, etc. then it could be an excellent year but those are some pretty big ifs.
Stay tuned! As always I'll be supplying housing markets reports on many of the most popular parts of the Valley.