California REALTORS® are optimistic about this year's housing market. According to the latest California Association of REALTORS® Market Pulse Survey, a vast majority (88 percent) expect similar or better market conditions in 2016. While positive about this year's market, among REALTORS®' biggest concerns are low housing inventory and overinflated home prices.
Karen Trolan, president of the Silicon Valley Association of REALTORS®, recently touched on these concerns and projected where market trends are heading. "Silicon Valley affords us with the opportunity to have a real estate market which is always well above the nation's average. Although we have our own niche market, we still are affected by national trends," said Trolan.
Trolan, who is a broker and assistant manager of the Alain Pinel Realtors Los Gatos office, pointed out that this year is a presidential election year. "That usually means that the government does everything in its power to keep the national real estate market at least at a plateau, if not growing. Although we are about 40 percent below the peak sales volume experienced in 2005, the effort will be to get the numbers up," predicts Trolan.
Trolan projects sales volume should increase in the first half of 2016, since job numbers continue to grow. She anticipates the 30-year fixed mortgage interest rate will increase as early as the second half of 2016.
"Economists do look at history as they look at all the markers that affect home sales. Some of these factors that influence the demand in California's home buying market include consumer confidence, job market and mortgage interest rates. A few other influences on home sales are any changes in home prices, types of clients (investors, foreign or speculators) and weather. In our area, these favorable market factors support an increasing sales volume," explained Trolan.
Trolan indicated if a property is not selling in any market, it is overpriced. "The price may change based on the market. The value is what a willing seller and willing buyer agree on. The market will show the value. We are seeing that the homes that sold over asking price, the amount paid over list price has been averaging over 9.5 percent. Almost 70 percent of properties are receiving multiple offers, at least two offers, keeping it competitive," said Trolan.
Economists predict sales volume will continue to increase when the interest rate jumps, then the remaining part of the year will slow, ending the year slightly up over 2015. It is expected that sales volume will be flat in 2017.
"The real estate market may not start rising again until after 2017 due to lower numbers of first-time homebuyers and lower homeowner turnover to buy an upgrade or relocate due to delayed retirement," said Trolan.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.