2017 is here and the biggest question on everyone’s minds-what is the Bay Area real estate market going to look like for the year? Rates were raised in December and we have President-elect Donald Trump taking the oval office. You may find yourself asking yourself should I be buying a home in Danville, Blackhawk, San Ramon, Walnut Creek, or anywhere in the Bay Area. Alternatively, maybe I should refinance my Danville home mortgage or San Ramon home loan? Zillow has five predictions on what 2017 may look like and what Trump policies could affect housing this year.
- More millennials will become homeowners and move out of their parents’ Bay Area house. They will be a huge force in the purchase market for Bay Area real estate in 2017. Due to the high cost of living, buying a home in the Bay Area is a challenge for many millennials. Over the past few years, a big trend has been that after college millennials move back in with their parents to save money. It is not as common in the Bay Area for millennials to be able to afford a 20% down payment, but there are so many options out there such as getting a FHA loan for that Danville property they are eyeing where the necessary down payment is not as steep.
- The rental market will ease up. East Bay rentals will become more affordable as income rises. Renting is a popular option especially for commuters in the Bay Area. Recently rent costs have soared making it even harder for many to save for a down payment for buying a home in the Bay Area. Zillow is predicting that there will be a shift in the rental market and will make renting a more affordable option for those trying to save.
- Equity in homes will continue to rise. According to Zillow, East Bay home values will rise 3.6% while national home values rose 4.8% between December 2015 and 2016. They are predicting that home values will continue in that fashion to rise. This means that if you have been looking to buy a home in Danville, San Ramon, Alamo, Walnut Creek, or another Bay Area city but haven’t had the inventory to choose from, you could be in luck this year as a rise in home equity will lead to more sellers putting their home on the market.
- Development of smaller homes closer to public transportation will rise and the number of commuters will increase. Cities will begin to focus on developing homes closer to public transportation in the suburbs to provide affordable housing. More people move to the suburbs for the affordable housing causing an increase in commuter traffic.
- New builds are going to cost buyers more. Due to rising cost of construction wages, East Bay home buyers are going to see larger price tags on new home builds. Buying a home in Dublin or buying a house in San Ramon where there are a large amount of new home developments in process will begin to get more expensive as a result of the rise in construction costs.