The seller’s market continues, especially here in California
I searched the internet to find out what leading economists say about the fact that home prices keep growing; wondering if the market will continue this trend throughout 2018. And the answer is a resounding YES! In fact, home prices are expected to climb 4.1% in 2018: 1.1 percentage point higher than the normal annual appreciation closer to 3%, but slower than the current annual pace of 6.9%.
Leading economists agree that home prices will continue to rise, although the gains may be smaller than they were. Here’s what these experts say is driving this seller’s market and what builders are doing because of it:
- Shortage of homes on the market
Did you know that there are 12% fewer homes to choose from nationwide than there were a year ago? Inventory shortages will continue to drive the housing market, and low inventory will continue to push up home prices. Instead of buying a new home, homeowners are investing in remodeling efforts to make their current homes feel and look brand new. Sellers, prepare for more cutthroat bidding wars because the supply of homes for sale will not keep pace with demand.
- Baby boomers and millennials are driving the housing market
New starts and renovated homes will feature designs that appeal to both millennials and baby boomers: like wide hallways that can accommodate strollers, for families with babies, and/or wheelchairs for aging boomers.
- New home building framework
New homes are being built in California using frameworks that makes it easy to add elements later. Think extra support beams behind shower walls to which grab bars can be added as older generations age in place.
- Builders focusing on entry-level homes
Economists have said repeatedly that increased residential housing starts, especially at the starter home level, are the key to stabilizing home prices down.
One perfect example is Santa Barbara home values. To get all the details, read my year end newsletter.
My high-end buyers will be happy to know that 51% of for sale properties are in the top one-third of home values. That means there’s more inventory out there to choose from in the luxury demographic. In fact, I usually have even more listings for you to choose from since I have my finger on the pulse of both the open and private sale markets.
On the other hand, if you’re listing your property in Montecito, Hope Ranch or any of Santa Barbara’s upscale communities, give me a call at 805.886.9378 or email me at Cristal@montecito-estate.com. I suggest you act quickly and take advantage of this seller’s market as home prices will keep growing.