Well, as the following will attest, 2016 is shaping up to be another very hot year for real estate in the Bay Area, including Marin County. This is the way 2015 ended as well!
Like in previous months, more than half of the nation’s most in-demand real estate markets are located in California as December comes to a close, with Bay Area cities claiming the top three spots.
In a recurring monthly analysis
, Realtor.com names the 20 hottest housing markets in the U.S. based on listing views on its website and where homes are selling the fastest. Eleven of those hot markets can be found in California, based on data from the first three weeks of December, and Golden State real estate should continue to command plenty of interest in the coming year.
“Pent-up demand and robust economic growth, combined with limited supply, will keep California tight in 2016, but more markets will challenge them as demand improves elsewhere,” Realtor.com Chief Economist Jonathan Smoke said in a statement accompanying the report.
For the second straight month, San Francisco
topped Realtor.com’s list of scorching markets, with a median list price of $748,000, the second highest of 20 cities and more than three times the national median list price of $228,000. San Jose
, the nation’s second-hottest real estate market, is also the most expensive, with a median list price of $848,000. Vallejo ranks No. 3, down from No. 2 in November. With a median list price of $384,000, the Solano County city is about half as expensive as its larger neighbors to the west and south.
Sacramento landed in the No. 5 spot, followed by San Diego (No. 6), Santa Rosa
(No. 8), Yuba City (No. 9), Stockton (No. 10), Los Angeles (No. 11), Oxnard (No. 12), and Modesto (No. 15). All 11 California cities were among the country’s 20 hottest in November
, while Santa Cruz dropped off the list this month.
Realtor.com says that homes in cities on its hot list sell 29 to 51 days faster than the nationwide average of 93 days. Combined, these markets have seen average days on the market decline by 15 percent on an annual basis.
The Bay Area’s largest two real estate markets are moving nearly twice as fast as the rest of the country, with homes selling in 47 days in San Jose and 49 days in San Francisco. In the Central Valley, where demand for homes is growing as more buyers head inland to score bargains, the pace of sales is even quicker: 42 days in Stockton, 43 days in Modesto, and 44 days in Sacramento.
U.S. home sales should climb in 2016 to levels we haven’t seen since the last housing boom — with millennials leading the charge — as continued economic prosperity appears to be on the horizon.
In its 2016 Housing Forecast
, Realtor.com projects that new and existing home sales will reach 6 million in 2016, the highest level since 2006. According to the report, home starts will see a 12 percent annual uptick, while sales of new homes will grow by 16 percent year over year. Home price appreciation will moderate to 3 percent next year, which Realtor.com Chief Economist Jonathan Smoke says signifies that the housing market is normalizing
Millennials — defined here as those ages 25-34 — are expected to make up the largest percentage of homebuyers in 2016, spurred on in part by growing incomes. Generation Y buyers are most concerned with neighborhood safety and home-construction quality, and they also want a reasonable commute.
Having rebounded from the recession, Gen Xers on the younger side of the spectrum (ages 35-44) will account for the second-largest pool of buyers. Two-thirds of this demographic are move-up buyers and will be trading up for a larger property or a nicer neighborhood.
Older Americans ages 65-74, the third-largest projected buyer demographic, will look to do the exact opposite, selling their spacious homes for smaller, newly constructed ones. These homeowners are expected to put their properties on the market in March or April and will place an emphasis on customization when searching for their next home.
Realtor.com predicts the U.S. economy’s health to hold in 2016, with the GDP increasing by 2.5 percent, up from 2.1 percent growth in 2015. Unemployment will decline from 5 percent at the end of 2015 to 4.8 percent by the end of 2016, while the number of jobs created — 2.5 million — will remain roughly unchanged. The forecast warns that tougher access to credit and rising home prices could ultimately stifle demand for housing and temper the benefits of the thriving economy.
So, once again, the word here is, if you need assistance in looking at the market in general, or as it relates to your present home, give us a call: Peter: (415) 279-6466; Jane: (415) 531-4091. As always, we'd be happy to help!