East Bay: Wrapping Up 2017

Green Escrow | Real Estate News

Not surprisingly the last quarter of 2017 in the East Bay housing market was a strong continuation of what had taken place during the preceding nine months. There were 6 percent more sales than in the previous final quarter in 2016; prices were up 10.2 percent and inventory was 2.6 percent higher.

The averages days on the market for homes in the East Bay was 23.

Moving forward into 2018 the prognosis is for more of the same, although the full effects of the recent tax reform policy remain to be seen.

Americans Maintain Confidence in Housing and the Economy

Real Estate Growth

The economic and housing out look is good in the minds of most Americans according to the National Association of Realtors’ first-quarter Housing Opportunities and Market Experience (HOME) Survey. 62 percent of the respondents feel that the economy is improving as compared with 48 percent a year ago.

Despite rising mortgage rates 77 percent of Westerners responding feel that now is a good time to sell a home and, some what surprisingly, 61 percent of Westerners still believe it is a good time to buy.

Statistics show that mortgage applications are down 11 percent on an annual basis and experts believe that the Federal Reserve’s intention to raise interest rates at least twice more this year will continue to limit loan activity while worsening already difficult affordability conditions.

Low Inventory, Higher Rates Face Buyers in 2017

Market News

A continuing low inventory of existing homes – both nationwide and particularly in the Bay Area – combined with rising mortgage rates, will have an adverse affect on first-time and millennial buyers.

As more than 95 percent of first-time homebuyers must finance their new home, rising interest rates in combination with other financial challenges such as student debt may price many out of the housing market.

Realtor.com estimates that millennial buyers will be approximately 33 percent although that rate will be considerably higher in Midwestern markets where demand remains strong and home prices much more affordable.

Bay Area Home Sales Expected to Decline in 2017 – Again

Green Escrow | Real Estate

The California Association of Realtors’ 2017 Housing Market Forecast is predicting that sales of single family homes in the Bay Area will decline by 5.6 percent in 2017. This comes on the heels of a projected 6.4 percent decrease this year.

The report cited two familiar reasons for the projected decline: restricted inventory and low affordability.

Meantime, the report predicts the area’s median sales price will increase by 6.4 in 2017 to $833,600 which means that only 29 percent of Californians will be able to afford the median-priced home.

Analysts believe that the healthy job market in the Bay Area will continue the demand for housing – it’s availability and affordability that remain the major questions.