We are already in the second month of 2016, and before you know it, spring will be upon us. Economists forecast that the housing market will continue its current positive trajectory, however there are some caveats that need to be considered in light of the volatility in global equity and commodity markets.
Generally speaking, rental rates and home prices are in an upward climb, which means that this year will see more people shopping for homes in Lafayette CA and nationwide. We expect that renters and homeowners from San Francisco will dominate the field of buyers for 2016.
Most economists have refrained from making specific forecasts for the year, preferring instead to stick to generalizations. The reluctance and caution could have something to do with recent lending news regarding government agencies loosening borrowing standards, which has also caused some to reflect upon what happened in 2008. Universally, most credible experts agree that we are not at risk of a repeat of the 2008 economic crisis, however there are very good reasons to anticipate a adjustment in certain segments of our market.
If you are in the market for homes in Lafayette CA, then it’s important to make note of some of the more relevant trends impacting 2016. The most notable changes are being driven by the current global economic uncertainty. There is no point on debating whether the market is over-reacting, whether there will be further adjustment, etc. Suffice it to say, we can all agree that there are external economic factors operating that are impacting the portfolios of most of us, and more broadly the world economic order.
According to John Burns Real Estate Consulting housing data across the US continues to show improvement, however the current negative economic news with the stock markets, oil and global dynamics will filter down to housing demand. US businesses have clearly pulled back, while consumers have continued to spend. The net result suggests slower growth ahead and improved housing affordability. We believe that this will eventually affect our market for homes in Lafayette CA.
This discussion will be continued in the next post that will zero in on more specific economic data and its anticipated impact on particular segments of the Lafayette housing market.