The housing outlook continues to look bright for Silicon Valley, even as it will continue to be challenged by a tight housing supply and low affordability, to a Bay Area real estate analyst. She believes with a new president who is business-minded, the country will be undergoing shifts, which could be positive for the economy.
Carole Rodoni, president of Bamboo Consulting, Inc. and former president of Fox and Carskadon Real Estate and Alain Pinel Realtors, recently told members of the real estate community at the Chinese American Real Estate Association's January seminar that she expects the economy to continue growing this year. She noted rising interest rates are a longtime coming and signal growth.
After years of historically low interest rates, the Federal Reserve increased interest rates in December for the second time in 10 years. Rodoni anticipates more rate hikes this year because wages are rising, the economy is growing, so the Feds are going to want to curb inflation.
As for the future economic climate, Rodoni announced with Donald Trump as the new president "we are turning a new page."
The Dow Jones Industrial Average closed above 19000 points for the first time ever and the 10-year Treasury yield hit its highest level for the year in November, signs that investors are optimistic about higher growth under a Trump administration. Rodoni explained that Trump, being a businessman, aims to grow jobs. He plans to lower the corporate tax, which is at a whopping 35 percent now, which will bring an infusion of cash and business into the U.S. economy.
Along with Obamacare, Rodoni expects Trump will tweak the Dodd-Frank Act and ease government regulation. Banks would benefit and so would investors. Look forward to massive spending on infrastructure, said the real estate guru.
The local picture looks bright. Silicon Valley's housing market is booming because tech companies are producing and have invested in staying in the region. In fact, Silicon Valley's growth has surpassed that of the country. While the U.S. grew 3.2 percent in the third quarter, the Bay Area region grew 4.1 percent and Santa Clara County grew 8.9 percent.
Rodoni said she balks when people say they can't live in the Bay Area because it is unaffordable. She insists in the Bay Area there are still places that are affordable, many of which are accessible by BART or Caltrain.
"Where you want to live is where your income allows you to live," said Rodoni.
A firm believer in real estate, she stated, "It is still the best thing to invest in real estate. Whether you are a buyer or seller depends on where you need to be. It's still the best investment of your lifetime."
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Variations of this article have appeared in local area newspapers.
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