Five Reasons to be Very Cheerful about Real Estate Prospects in 2016
The holiday season is almost here, so it's nice to be able to be so upbeat about prospects for real estate in the coming year.
In recent blogs and other communications with you, I've been focusing on a number of real positives, both locally and nationally
I thought now would be a great time for a brief recap of five of the key highlights:
A Flourishing Local Economy - We are, of course, at the epicenter of the current tech industry boom. This means that the area is uniquely well poised to benefit from further growth in this critical sector. Facebook is expected to expand its current workforce of 9,000 by 20% a year and Toyota's recent announcement of a new $1billion innovation hub, plus the proposed highly ambitious Vallco Shopping Mall in Cupertino, will soon start to be reflected in property prices and desirability. Perhaps the most significant development of all next year will be the opening of the new Apple Campus, bringing worldwide media attention to the region.
Outperforming the Rest of the Nation - California is outperforming the rest of the nation in median home prices. We appear to be seeing a similar pattern as existed in the immediate years prior to the recession, whereby the gap is growing ever wider. The California single family home resale market is expected to rise by 6.3% next year, with a continued steady improvement in median prices.
Extra Market Fluidity - Rising prices have reversed equity losses. We're now seeing the lowest figures of homes in negative equity in The Golden State for several years (around 7.3%). This should enable more sellers to finally be able to move upscale, possibly even helping to address the ongoing issues of inventory shortages.
Better Confidence in the Economy - Increased economic confidence inevitably boosts home buyer sentiment. Last weeks' announcement by the Fed of a small rise in interest rates can rightly be interpreted as a sign that the economy is indeed in the best shape it has been for a very long time. Indeed, as we reported recently, in its Housing Forecast for next year, realtor.com predicts that total sales for existing and new homes will top 6 million for the first time since 2006.
More Millenials to Become Home Buyers in 2016 - The return of older millennials (25-34 year olds) to more active home purchase has been one of the key characteristics of the 2015 real estate market. This very welcomed trend is expected to accelerate in 2016 with this pivotal group comprising the largest demographic of home buyers, up from 30% of the strong current market. This is excellent news for everyone in the house selling chain, as so many millennials will of course be first time buyers, facilitating transactions through every price level and allowing more existing homeowners to move upscale. It's already a growing trend that has helped to drive this year's impressively robust market conditions right through to the end.
I hope that these very upbeat "reasons to be cheerful" will inspire you to contact us very soon and get 2016 off to a great start. Whether you're a home seller, buyer or property investor, next year is going to provide some irresistible opportunities.
For now can I take this opportunity on behalf of my staff and me to thank you for all your support in 2015 and to wish you the happiest of holiday seasons and an exceptionally healthy and successful 2016.