How Will 2017’s Spring Home Buying Market Compare to Last Year?
2016 started off a little slow but finding momentum in February and March, where the housing market experienced increased sales numbers. Spring proved to be strong with still historically low mortgage rates, and a large increase in jobs in statewide in April. By May, the median price for all homes shattered previous all-time highs for the state.
2017 started off strong, and then saw a drop in sales in February, (the weakest in 3 years). In early March, the Federal Reserve raised interest rates for the first time this year. However, headed into the spring buying season, most Realtors remain optimistic about California’s spring housing market. There are several factors that will determine if this year continues the momentum of 2016.
The Good News
Despite the drop in sales from January, February, 2017 is still looking strong with single family sales up 4.9% statewide over 2016. Median home prices are also up 7.6% from 2016. Job increases and low unemployment rates helped lead the demand last year and are expected to stay steady as the economy improves.
Housing inventory statewide continues to be one of the biggest challenges. Little has changed from 2016 and yet new statewide active listings have fallen 13.9 percent from a year ago! Some have predicated 2017 will be the year millennials become home buyers to a great degree. Unfortunately, affordability and low inventory in regions like the Bay Area could drive them elsewhere in the country. Despite these challenges, the California Association of Realtors predicts an increase in home sales in 2017.
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