National Association of Realtors: Expect a More Modest Market in 2016

NAR: Expect a More Modest Market in 2016

 From: DAILY REAL ESTATE NEWS

In 2015, the housing market reached its best year in nearly a decade, but 2016 will likely see a slowdown in many housing markets across the country. Home sales are forecasted to increase this year, but at a more moderate pace, “as pent-up demand combats affordability pressures and meager economic growth,” says Lawrence Yun, chief economist for the National Association of REALTORS®.

Yun says pent-up demand, sustained job growth, and improving inventory conditions will be the main triggers pushing the expected gains in new and existing-home sales this year.

However, Yun cites rising mortgage rates, home prices that still outpace wage growth, and a fragile global economy as the main challenges that could hold back a stronger pace of sales this year.

“This year, the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates,” Yun says in a new video released highlighting his expectations for the housing market in 2016. “Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we’ll begin to feel that again.”

Yun, still crunching the final month of data for 2015, expects that existing-home sales will finish the year up 6.5 percent from 2014. That marks the highest since 2006 but is about 25 percent below the prior peak set in 2005 (5.26 million sales estimated in 2015 compared to 7.08 million in 2005).

Home prices were also up. The national median home price for existing homes is expected to near $221,200 for 2015 — about 6 percent higher than 2014. In 2016, existing-home sale prices are projected to rise between 5 and 6 percent, Yun notes.

To watch the video from The National Association of Realtors by Mr. Yun please visit: http://realtormag.realtor.org/daily-news/2016/01/13/nar-expect-more-modest-market-in-2016?om_rid=AACmlZ&om_mid=_BWlrrVB9JySAyz&om_ntype=RMODaily

I read this article at: http://realtormag.realtor.org/daily-news/2016/01/13/nar-expect-more-modest-market-in-2016?om_rid=AACmlZ&om_mid=_BWlrrVB9JySAyz&om_ntype=RMODaily

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

 

C.A.R. releases its 2016 California Housing Market Forecast

As a full time, professional Realtor – I get asked this question very often.  How is the market?  What do you think will happen?  It is one of my favorite topics.  I thought I would share the California Association of Realtors Market Forecast.  I would love to hear your thoughts and opinions – don’t be shy.

C.A.R. releases its 2016 California Housing Market Forecast

California home sales to increase slightly, while prices post slowest gain in five years

LOS ANGELES (Oct. 8) – California’s housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 California Housing Market Forecast,” released today.

The C.A.R. forecast sees an increase in existing home sales of 6.3 percent next year to reach 433,000 units, up from the projected 2015 sales figure of 407,500 homes sold.  Sales in 2015 also will be up 6.3 percent from the 383,300 existing, single-family homes sold in 2014.

“Solid job growth and favorable interest rates will drive a strong demand for housing next year,” said C.A.R. President Chris Kutzkey.  “However, in regions where inventory is tight, such as the San Francisco Bay Area, sales growth could be limited by stiff market competition and diminishing housing affordability. On the other hand, demand in less expensive areas such as Solano County, the Central Valley, and Riverside/San Bernardino areas will remain strong thanks to solid job growth in warehousing, transportation, logistics, and manufacturing in these areas.”

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 2.7 percent in 2016, after a projected gain of 2.4 percent in 2015.  With nonfarm job growth of 2.3 percent in California, the state’s unemployment rate should decrease to 5.5 percent in 2016 from 6.3 percent in 2015 and 7.5 percent in 2014.

The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.

The California median home price is forecast to increase 3.2 percent to $491,300 in 2016, following a projected 6.5 percent increase in 2015 to $476,300.  This is the slowest rate of price appreciation in five years.

“The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market’s momentum next year. Additionally, as we see more sales shift to inland regions of the state, the change in mix of sales will keep increases in the statewide median price tempered.”

I read this article at: http://www.car.org//newsstand/newsreleases/2015releases/2016housingforecast

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Check Out These 8 Surprising Predictors of Housing Prices

Oh this was a fun article to share – we call it the TJ effect.  

Enjoy – Sabrina 

Check Out These 8 Surprising Predictors of Housing Prices

Like investors in the stock market, 1933 Saint Gaudens Double Eagle coins, or orange juice futures, home buyers and owners want to know which way prices are heading. Are valuations heading up, up, up, making it the perfect time to buy? Or are they beginning a precipitous decline from their peak—making it high time to sell? To read the tea leaves, they might focus on the latest jobs reports, check out what’s going on in other markets, or scrutinize the writings of economists.

But when it comes to nailing the best deal in real estate, you can get a jump on the competition! Inside-track insights can be found in the most unusual places—such as on a grocery run, or at the gas pump. We’ve rounded up eight surprising indicators of change in home prices. Do they play a role in pushing the numbers skyward or down into the dirt? Or are they false prophets? We’re here to help you sort it out!

  1. Gas prices

Sure, it feels fantastic to fill up your car with gas for just $35 when it used to cost almost $50. But if you’re looking to buy a home, the financial benefit of cheap gas might be overrated—as gas prices fall, home prices inevitably go up. And homes sell faster, too, which takes a toll on available inventory.

For every $1 decrease in gas prices, home prices increase by roughly $4,000 and the average time to sell a property decreases by 25 days, according to a study by Longwood University and Florida Atlantic University.

Lower gas prices lead to increased consumer confidence and more disposable income for potential buyers, Longwood professor Bennie Waller explains. In addition, the listing broker—who has to travel between properties—is more likely to market more aggressively and have more showings when gas is cheap.

  1. Trader Joe’s vs. Whole Foods

When it comes to healthy eats, cost-conscious gourmet market Trader Joe’s and pricey, environmentally conscious Whole Foods each have their own massive cult following. But it turns out, if you’re seeking a neighborhood where homes are worth more—and gaining in value—you’d better know which store to look for.

Homes near the two foodie superstores significantly trump the national average home value, but homes near a Trader Joe’s are worth 5% more than homes near a Whole Foods, according to RealtyTrac. So close, Whole Foods!

Homes near a Trader Joe’s also appreciate faster, with an average appreciation rate of 40% from the time of purchase. Meanwhile, homes near a Whole Foods appreciated 34%, the same as the national average. So even if you do tend to shop at “Whole Paycheck,” you’d probably do better to buy a home near TJ’s—and load up on some Two-Buck Chuck while you’re at it.

  1. Sports facilities

Walking distance to the big game? Score! Living near a stadium clearly is not a hard sell for sports fans, but even those without an obsessive rooting interest in the local teams should pay close attention if there’s a major sports facility nearby.

Moving a residential housing unit one mile closer to a professional sports facility increases its value by $793. But the effect disappears after four miles, according to researchers at the College of William and Mary and University of Alberta, who extracted property data within 5 miles of every NFL, NBA, MLB, and NHL facility in the U.S. So sidle up to that stadium—just be sure you have a dedicated parking space.

  1. Marijuana

The legalization of marijuana was predicted to have a major impact on state tax revenues, and with people relocating to take advantage of its medical benefits or just because they enjoy a regular toke, some have suggested that legal pot might also push up real estate values.

Marijuana’s impact on housing is a tale of two states: Colorado and Washington, the only ones that have legalized the sale of recreational marijuana.

The buzz is felt more in the real estate market of Colorado. Since the doors opened for recreational sales in January 2014, housing prices have appreciated 20.4%, much higher than the 15.2% across the country over the same period.

Marijuana sales in Washington are more modest, and so is the real estate growth. The state’s housing prices have risen by 7.3% since it launched its legal marijuana market in July 2014—the height of the yearly housing market—while at the national level, they increased 6.5% over the same period. (Keep in mind that housing prices are generally lower in the winter and higher in the summer, the purpose is not to compare the numbers of Colorado to Washington).

Of course, it’s hard to say whether the legalization of marijuana is really driving those numbers. After all, both Denver and Seattle are hubs for tech businesses that are fueling employment, which in turn fuels the housing market. But if you already own a home in Colorado or Washington, you’ve got plenty of reasons to be mellow and to listen to “Dark Side of the Moon” on a continuous loop.

  1. Temperature change

Global warming affects not only nature, but also our daily lives and housing decisions. The National Association of Realtors® looked at home prices and temperature change over the past four years and found what seemed to be a negative correlation between temperature increase and housing prices.

National Association of Realtors

Out of the 82 markets studied, those with the highest gains in housing prices typically had a small increase in temperature (up to 2 degrees Fahrenheit). For example, in Atlanta, GA, the temperature increased 1 degree while house prices increased 78%. But markets where the temperature rose more than 3 degrees did not experience significant price gains, such as Little Rock, AR.

  1. Casinos

Part of Las Vegas’ legendary success story is that casinos brought wild prosperity to a barren desert area. But in fact, Sin City is an American anomaly in just about every way imaginable, not the least of which are real estate valuations. The truth is, casinos across the country, from riverboats to Native American reservations, usually have a negative impact on surrounding home values—by 2% to 10%, according to various studies.

One case study showed that in Henderson, NV, properties within a mile of a proposed large-scale casino would see their values fall by $9,200. Snake eyes!

  1. Highways

Is it a good idea to live close to the highway? Yes … and no. It depends on just how close we’re talking.

A case study of the Superstition Freeway (U.S. Route 60) corridor in Mesa and Gilbert, AZ, showed that single-family homes within 0.5 miles of the freeway were adversely impacted. But the negative impacts were more than offset by housing price appreciation in the surrounding areas. Average sales price appreciation for homes within 5 miles of the freeway (including negatively affected properties) was higher than the whole metropolitan area. So while you probably don’t want to buy right by an exit ramp, easy access to a transportation corridor is definitely a strong selling point.

  1. Trees on the street

Everyone knows that stately old-growth trees add major charm to a neighborhood—and are probably an indicator of more expensive homes. But did you know just how expensive? A recent study found that houses on streets where there were trees fetched an average of $7,130 more than houses on treeless streets. Maybe it’s time to consider branching out.

What do you think improves a homes value in your area?  Let The Caton Team know – we’d like to hear your opinion!  

 

I read this article at: http://www.realtor.com/news/trends/eight-surprising-things-that-impact-property-values/

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

Here’s why 2016 will bring good news for potential homebuyers…

I find it important to share articles I come across to educate my clients and readers.  I often write my own blog entry – but find sharing information much more powerful than standing on a soap box.  Enjoy this article from Redfin found on Housingwire.  ENJOY! – Sabrina I’ve added my 2 cents in bold italics.

Here’s why 2016 will bring good news for potential homebuyers

Next year isn’t predicted to bring any giant hoopla to set off the market. However, moderate growth is more sustainable, and better for buyers.

According to Redfin’s forecast for 2016, “Most economists agree that housing prices and sales will continue to grow in 2016, just at a slower pace. Call it a slowdown, but not bad news.”

The New Year doesn’t bring all good news, with some bad tossed in the mixed. Overall, Redfin said, “All things considered, we see a fairly uneventful housing market next year.”

Here are Redfin’s five housing market predictions for 2016:

  1. Prices and sales will grow half as fast

As price growth ebbs and mortgage rates rise, more homeowners will stay put. Sales will grow about half as fast as they did this year and prices will rise at a more normal 3.5% to 4.5%, down from almost 6% this year.

According to a recent report from RealtyTrac, for more than a third of the nation’s major metro areas, home prices have reached all-time highs in 2015.

Here on the SF Peninsula housing demand is very high with so much job growth and inventory is very low.  I expect more of the same in 2016.

  1. Easier Credit

Americans for whom a mortgage has been just out of reach will have a better shot at qualifying for one in 2016.

Lenders will embrace new ways to measure creditworthiness and mortgages will evolve to serve a changing American household. For example, credit scores will better evaluate a person’s rental history and utility bill payments. More loans will allow buyers to include income from room rentals, live-in parents and extended-family members.

In a significant move for housing regulation, last week a bill was introduced in the House of Representatives that would allow Fannie Mae and Freddie Mac to consider alternative credit-scoring models beyond the FICO credit score the government-sponsored enterprises currently use when determining what loans to purchase.

Yes, since the housing crash years back, lending as improved.  That doesn’t mean it is easy – it is tedious to say the least.  But it is for the overall well being of our market.  If you are thinking about buying a home – please get a full pre-approval completed with your lender of choice.  Understand your budget and adjust your wants/needs list accordingly.  

  1. More (and older) first-time buyers

We expect first-timers to make up a bigger portion of the market than they did this year. The reason is simple: The market will be more welcoming to them thanks to the aforementioned slowing price growth and easier access to loans. This year’s market dropouts have saved for bigger down payments and will be ready to give the market another shot early next year. And more of those millennials who had been holding off on buying for various reasons will finally be ready and able to in 2016.

In the Mortgage Bankers Association’s housing report that looks at the future decade, Lynn Fisher, MBA’s vice president of Research and Economics, said, “Improving employment markets will build on major demographic trends – including maturing of Baby Boomers, Hispanics and Millennials – to create strong growth in both owner and rental housing markets over the next decade.”

Oh yes, as those effected by the crash heal their credit and save their money – there will be a new influx of buyer coming into the market – again for the very first time.  We will also see millennial buyers investing in real estate.

  1. Slower market, slowing closings

The 2015 housing market was the fastest we’ve seen at Redfin. From January to October, the typical home was on the market for 36 days, four days faster than the same period in 2014. We expect the market to slow in 2016 as government-backed loans become more common and cash sales become less so. Because of low inventory, bidding wars will still be in force next year, but there will be a lower ceiling on price escalation as 2016 buyers won’t be willing or able to go as high as buyers have in recent years.

To help, here are a few tips from Minnesota Realtor Craig Kamman to help win a bidding war. On example he listed is to offer full price or more. Money is a major factor in a seller’s decision, but not the only one.

I also feel the changes in lending, that went into effect in October of 2015 – will slow down the pace of the market a tad.  Though we do see many all cash buyers on the SF peninsula who will not be tied to loan regulations.  That doesn’t mean cash is supreme king – but it does mean buyers with loans will have to set themselves apart.  The Caton Team as a tool box of tactics we use to help our buyers.  

  1. Continuing inventory shortage

The biggest risk to the 2016 market will be the continuation of inventory shortage, especially in the affordable segment of the market. The number of homes for sale shrank from 2014 to 2015 in 45 of the 60 metro tracked by Redfin. Inventory across all 60 metros is down 4 percent from a year ago.

The most recent pending home sales report from the National Association of Realtors said that sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets.

The SF Peninsula has limited land.  I have already seen many homeowners add onto their existing homes instead of jumping into the buyer pool  Which also effects our inventory.  

My advice – if you want to be a SF Peninsula owner – do not give up so easy.  Each home on the market is a unique opportunity and should be treated as such.  It is a journey – not a race.  Call or click The Caton Team to learn more about buying and owning property in Silicon Valley.

I read this article at: http://www.housingwire.com/articles/35823-heres-why-2016-will-bring-good-news-for-potential-homebuyers

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

VISIT OUR INSTAGRAM PAGE: http://instagram.com/thecatonteam

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

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Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008