What can you expect from the 2018 real estate market? Let’s take a look at the 2017 market recap and see which market trends may continue this year.
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It’s time to recap what happened in the 2017 real estate market. I also have a forecast of what you might be able to expect in 2018 for Porter Ranch and the San Fernando Valley.
2017 started off with very low inventory. There were only about 47 properties for sale out of 11,600 single-family units. We ended the year with slightly less inventory. That low inventory really fueled the market—not just here in Porter Ranch but all over Southern California.
When you look at the inventory in 2017, it stayed very low the first half of the year. In June, as spring transitioned into summer, inventory doubled from what it was at the beginning of the year. Still, it just wasn’t enough to satisfy buyer demand. Even though inventory increased in the summer, that inventory got gobbled up.
From the beginning of 2017 to the end of 2017, inventory decreased by 24% and the average price in San Fernando Valley went up 13% in most neighborhoods.
In most neighborhoods, there is only two to two and a half months of inventory in most areas. As a result, most prices are going up.
Low inventory really fueled the 2017 real estate market.
In order to have a healthy market, there need to be about 7,500 homes for sale in the San Fernando Valley. If you look at the total amount of inventory at the end of 2017, we only had about 1,700 homes for sale. That is down from the 2,200 homes for sale at the end of 2016.
You can see more details about the 2017 real estate market in these charts.
So, what can you expect in 2018?
I think the 2018 market will be more of the same. There is very little inventory and economic growth in the San Fernando Valley as a whole economically. A lot of people are priced out of areas like the West Side, Pasadena, Glendale, and the South Side of the Valley. As a result, more people are moving up to the North Side of the Valley, where they can get more house for their dollar. Homes are moving quickly in this area because they are more affordable and there is a lot of competition. I predict that we will see about 5% to 9% growth in both neighborhoods.
If interest rates go up, that could have an impact on our market. We’re also keeping an eye on how the new tax reform bill will impact real estate here in the San Fernando Valley. We’ll have more information about that in our next video.
Do you want to know how much your home is worth in the 2018 market? You can get a free market evaluation here.
As always, please don’t hesitate to reach out to me with any other real estate questions. I would be happy to help you!
