LOS ANGELES—Affordability is the biggest concern among California realtors, according to a recent sentiment survey from the California Association of Realtors. California realtors are less optimistic about home sales in the upcoming year, due to affordability as well as lack of supply.
“Realtors are less optimistic about the housing market conditions over the next year because of a few reasons, according to our survey results. Lack of affordable housing, economic uncertainty, and difficulty in acquiring a loan are some of the reasons cited for the decline in their optimism. Realtors were more concern about affordability than supply,” Oscar Wei, senior economist at the California Association of Realtors, tells GlobeSt.com. “Affordability became the biggest concern for the first time in ten months.”
While sentiment is down for the coming year, current home sales are strong. In August, pending home sales were up 6.4% year-over-year, which will likely produce higher closed sales in September. This is the fifth consecutive month of increased pending sales year-over-year. “Higher August pending sales suggest more closed sales in September,” say Wei. “So, in the immediate term, we may see an increase in sales activity. However, affordability remains an issue in the upcoming year with prices and interest rated expected to rise. Both increases will lead to lower affordability.”
On a month-to-month basis, home sales actually declined by 1%. All of the major areas of California saw increases in home sales, with Southern California, San Francisco and the Central Valley leading the state.
Wei had a lukewarm outlook on the housing market for the remainder of the year, and a slow 2017.
“Fundamentals should continue to support housing demand, but we don't expect sales to be robust for the rest of the year because of supply constraint and low level of housing affordability,” he explains. “At the state level, we expect the median price to continue to increase by mid-single-digit for the rest of 2016, when compared to 2015. Home price appreciations should continue to slow down in 2017. Housing inventory will remain in short supply in at least the next couple years.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
LOS ANGELES—Affordability is the biggest concern among California realtors, according to a recent sentiment survey from the California Association of Realtors. California realtors are less optimistic about home sales in the upcoming year, due to affordability as well as lack of supply.
“Realtors are less optimistic about the housing market conditions over the next year because of a few reasons, according to our survey results. Lack of affordable housing, economic uncertainty, and difficulty in acquiring a loan are some of the reasons cited for the decline in their optimism. Realtors were more concern about affordability than supply,” Oscar Wei, senior economist at the California Association of Realtors, tells GlobeSt.com. “Affordability became the biggest concern for the first time in ten months.”
While sentiment is down for the coming year, current home sales are strong. In August, pending home sales were up 6.4% year-over-year, which will likely produce higher closed sales in September. This is the fifth consecutive month of increased pending sales year-over-year. “Higher August pending sales suggest more closed sales in September,” say Wei. “So, in the immediate term, we may see an increase in sales activity. However, affordability remains an issue in the upcoming year with prices and interest rated expected to rise. Both increases will lead to lower affordability.”
On a month-to-month basis, home sales actually declined by 1%. All of the major areas of California saw increases in home sales, with Southern California, San Francisco and the Central Valley leading the state.
Wei had a lukewarm outlook on the housing market for the remainder of the year, and a slow 2017.
“Fundamentals should continue to support housing demand, but we don't expect sales to be robust for the rest of the year because of supply constraint and low level of housing affordability,” he explains. “At the state level, we expect the median price to continue to increase by mid-single-digit for the rest of 2016, when compared to 2015. Home price appreciations should continue to slow down in 2017. Housing inventory will remain in short supply in at least the next couple years.”
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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