Experts. Every industry, topic or study has them. Yes, they have numbers to crunch and metrics to monitor, but at the end of the day, they can’t see the future just like the rest of us. But they can sometimes be more right because they aren’t blindly guessing.
Here’s a recent Forbes article containing eight predictions what the 2017 real estate market will be like by housing economists and experts. We will break down and discuss each topic and point.
First, they predict prices will rise, but slowly. This may be true, but their prediction is broad and generic focusing only on the national housing market as a whole. We feel it is more of a local issue and each market is going to be very different than the next. Here in Southern California, we’ve seen inventory so low that it’s reached levels under 30% in some cities.
Second, they predict housing affordability will get worse. This is a no-brainer. Of course affordability will get worse if home prices continue to rise! Duh!
The experts in the article state a third point that mortgage rates will be volatile. This is a great point actually. Many indicators recently and over the past year point to this. Less jobless claims, inflation, easier credit, and the fact the Fed has already raised rates twice all support this. If you’re planning on buying a house, 2017 might be your last chance to lock in the historical low rates we’ve seen since the crash.
The Forbe’s article also states that credit availability will loosen and become easier to get. Down in the trenches, we’ve already seen this with loan approvals for our buyers and other credit. Does it become even more available? Maybe, but let’s remember loose credit standards was partly responsible for the housing crash.
The fifth prediction is that housing supply will improve but not to normal standards. Considering what we already said about low home inventory, we feel this is a moving target that is hard to map. Housing inventory can be seasonal and each month is different. And when you combine that fact with localism, predictability is hard to come by.
Sixth, experts say more millennials will buy a home. We agree. Many younger people felt purchasing a home was a waste of time and money when the housing crash ruined whole neighborhoods. Now that enough time has passed and they’ve seen that renting for life isn’t cost-effective, they are jumping into the home buying market.
The next expert prediction is that buyer competition will grow. We are already there in our professional opinion. The buyer competition goes hand-in-hand with lack of inventory. This is economic supply and demand in action.
The eighth and final prediction focused on President-Elect Donald Trump’s policies and the uncertainty of it. This is an emotionally charged topic no matter what side of the nation you’re on. The civil war of our politics lately only ensures that none us can predict what will happen. One thing is for sure, it won’t be boring.