Jeff’s 2017 Annual Market Trends

The 2017 Peninsula real estate markets had one of the strongest years on record. The number of homes sold were up in most communities over 2016, while median prices were up double digits in many markets. A chronic shortage of homes for sale, coupled with strong buyer demand resulting from strong tech hiring, fueled the run up in home values.

Update on the Market Cycle

Market cycles dating back to 1980 show that the market typically appreciates for 5-6 years after prices bottom out during a cycle. Since prices bottomed in most areas at the end of 2009, I was early in predicting the market would change in 2015 or 2016. With the help of the federal government driving down interest rates, strong local job growth, and the “Trump bump” rise in the stock market, home prices have risen far higher than I could imagine.

2018 Market Forecast

Now that prices have doubled since 2009, where will the market go from here?  No one knows how long the “melt up” in local real estate prices will run, but here are the indicators I watch:

  1. Duration– entering 10th year of the typical 7-10 year cycle
  2. Values– are more than twice the low prices of 2009; the market usually reverses shortly after home values double
  3. Economic outlook– when interest rates invert (i.e. short-term rates are higher than long-term rates) the economy usually stalls within a year; rates have not inverted yet, but are getting close

The spring market (February to June) should be very strong for Peninsula communities due to continuing low inventory.  Beyond that timeframe, I expect the market to slow during the second half of 2018, or during 2019.  I look forward to keeping you updated on the above indicators and the state of the Bay Area market during 2018!


WANT MORE SPECIFIC INFORMATION?

If you would like an in-depth analysis of market trends in your neighborhood, or assistance with home preparation or repair, give me a call at 650/823-8057, or email: Jstricker@apr.com , or visit my website: Jstricker.com.  I would enjoy assisting you!