The last few years have been good for California real estate, at least when you compare them to the decade previous. And as such, it’s no wonder that more and more people are looking into the future of the housing market. For 2016, things aren’t expected to change tremendously, but the changes that experts are predicting will have a direct impact on the market and all the buyers or sellers participating in it.
The California Association of Realtor’s 2016 Housing Market Forecast was just released, and it has some interesting info on it that should help you get a better idea of what to expect next year. For starters, home sales are on track to increase by 6.3% over the total for 2015. That’s great news for the market, and an even bigger increase over the 2014 sales totals. In short, the market is still on the rise.
As for pricing, increases are still expected but not quite as much as total sales. Median home price in the state is expected to increase by about 3.2%, reaching around $491,300. That’s about half the growth that occurred from 2014 to 2015, and is similar to the expectations for the rest of the nation for 2016.
And as for interest rates, buyers can still expect low levels despite the fact that rates will increase slightly, most likely reaching around 4.5% by the end of the year. This is great news when combined with the decrease in unemployment rates expected to take place, and one more reason that growth is expected.
It is important to note that the overall trends and changes of the California housing market will vary depending on location and market competition. For example, the tight inventory of places like the Bay Area will likely mean that growth will be limited. And in high-end, upscale communities things are expected to remain steady or increase, though median home prices in those locations will obviously rise more than in lower income areas of the state.
All in all, this means that for 2016 you can expect sales to increase in the real estate market, as well as overall prices for homes. However, the rising costs won’t be on pace with the rising sales and as such the markets will remain competitive throughout California. Things are still on the increase across the board, and that’s good news for everyone involved in the housing market this year.