All good investors know that understanding real estate trends can help you make smart financial decisions. So with the home buying season quickly approaching, it’s time to assess game-changing California real estate trends.
Demand for Real Estate Will Increase in 2016:
The dream of home ownership isn’t dead. In fact, with more people re-entering the job market and incomes predicted to increase, you can expect to see California home sales pick up. The California Association of Realtors (C.A.R) estimates 2016 will see a 6.3% increase in housing sales compared to what we saw in 2015. That’s the equivalent of 433,000 new homes sold.
Median Home Prices Will Continue to Increase:
A 2016 Market Forecast created by the C.A.R. supports the National Association of Realtors (NAR) estimates that median home prices in the state will continue to increase. Within the US housing market, the 2015 median home price was $221,400. This year, NAR predicts the median home price will climb to $231,000. In California, median home prices have increased 6.3% over the past 12 months.
That dramatic increase in home prices can transform your portfolio, helping you strengthen your buying power and competitive position. With higher home values and low-interest rates, it can be a great time to sell a property for a great return, a move that will allow you to re-invest in new opportunities.
The 2016 Real Estate Market Will Change Mid-Year:
It’s no surprise that the Federal Reserve is planning on increasing interest rates this year. Though the increase will almost certainly take place, you can also assume that the Fed will raise rates gradually. First Tuesday Journal, a California source for real estate, estimates that the fixed rate mortgage (FRM) rate increase will likely happen mid-2016.
Based on this information, you can assume that many people will try to beat the rate increase by purchasing their home in the first half of the year, because no one wants to pay more for their home than they have to. If you’re a flipper, or if you simply want to reduce your portfolio, predictions indicate it would be wise to prepare your home for sale and to list it sooner rather than later.
Regardless of your investment strategy, the 2016 California real estate market will prove to be a continuation of 2015’s excitement. Keep these trends in mind to make sure you’re ready to leverage every possible opportunity to maximize your returns.