By Nancy Puder ~
Most indicators are showing that the number of California home sales will increase by about 6.3 percent in 2016 due to continued job
growth. Interest rates, currently around 4.5 percent, should remain at a historic low. It’s interesting to note, however, that home prices are showing the slowest gain in 5 years.
Shortage of inventory, along with an affordability issue, are two reasons home prices are increasing at a slower rate. Although a shortage of inventory will usually drive prices up, that increase is hampered by a lower percentage of buyers who can afford to buy. As these two factors struggle to compete with each other, home prices will probably remain stable but homeowners should not expect much of an increase in their home value in 2016. This prediction is general in nature and there will, of course, be exceptions. For instance, $2 million -plus homes, usually purchased with all cash, will probably not be as affected as the average priced home.
California Association of Realtors (CAR) President, Chris Kutzkey, predicted that “solid job growth and favorable interest rates will drive a strong demand for housing next year.
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.”
The Central Coast of California has always been a desirable place to live with it’s gorgeous beach setting and easy lifestyle. It has attracted many new homebuyers over the past several years. The popularity of Central Coast Living, also known as SLO Living, has driven prices way up since the recession. Limited job opportunities, though, will probably keep home prices from significantly increasing in 2016.
If you would like to discuss either purchasing a home or selling your own property, contact me anytime. I always enjoy hearing from you! Initial consultations are always free, and include a free personalized analysis of your property value.
Nancy Puder is a real estate broker with Nancy Puder & Associates, the premier real estate boutique company in Arroyo Grande, CA. Nancy Puder is one of the largest listing brokers on the Central Coast. Call or Text Nancy (805)710-2415 with your real estate questions anytime. She always enjoys hearing from you! To access other articles written by Nancy Puder, go to www.nancypuderassociates.com. Readers can also email [email protected] with questions or to discuss their real estate needs.