What Does 2017 Hold for Our Market?

Today, we're taking a look back at how buyers and sellers were affected in the 2016 market and looking ahead to how they might fare in this year's market.

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Happy New Year! Today, I wanted to take a look back at the market from 2016 and look ahead to predictions for what we will see from the Porter Ranch market in 2017.

This year, we saw a lot of price gain throughout California. Many neighborhoods in the San Fernando Valley saw values rise close to pre-recession levels. However, inventory was quite low throughout most of the year; 10% to 30% less than 2015 depending on the neighborhood. This really made 2016 the year of the seller.

The amount of sales actually decreased despite high demand, but that's because of the low inventory. There's also not many places to build new homes. The big issue for buyers now is making sure they can remain in the market with prices having gone up exponentially over the past few years and affordability dropping below 30% in our state.

We definitely want to keep an eye on interest rates in 2017.

These are things we'll need to keep an eye on this year, especially considering that toward the end of the year, interest rates increased by about 0.5%. This actually affects the amount of money buyers can afford to spend on a home. We even had a few instances in November where the buyer had to bring in more money because they didn't lock their rate in before the increase.

The Fed is expected to raise rates multiple times throughout 2017. If they do, it will obviously continue to affect the purchasing power of buyers. We're seeing that when many homeowners buy a new home, they keep their current property due to the fact that if they purchased in the last seven to eight years, there's a good chance they have an interest rate under 4% that they don't want to give up. This is more inventory that's not coming on the market. 

In 2017, interest rates will be the big thing to keep an eye on. Again, rates continuing to go up would slow down the market because it would affect buyers' purchasing power. Demand is still high and inventory is still very low. We'll certainly keep you updated on the market throughout the year.

If you have any questions about our market or you're thinking about buying or selling a Porter Ranch home, give me a call or send me an email. I'd be happy to help.