Where is The Sacramento Real Estate Market Headed in 2016

Where is the Sacramento real estate market headed in 2016 you ask?  Here is what the chief economist at California Association of Realtors (CAR) has to say about what will happen over the next year or so in California and specifically in the Sacramento Region.

We all heard in 2015 that interest rates where going up.  However, it never happened due to the global economic slowdown, the volatility in the stock market and the fact the feds did not articulate all the moving parts creating uncertainty.

Interest rates are expected to go up in 2016 and 2017.  The feds are being cautious because they do not want to bring economic growth to a halt while also not increasing too slow which will cause zero leverage when the next down turn hits.

We all know that inventory has been low for some time now.  Here are some reasons why:

• Affordability challenge for repeat homebuyers
  • Low rate on mortgage
  • Low property taxes
  • Could not qualify for a mortgage today
  • There is nowhere to move to with low inventory
• Foreclosure pipeline is dry
• Investors renting instead of flipping
• New construction recovering, but still low compared to previous years
• Measurement error due to pocket listing is a possibility
• Demographics:  Trade-up buyers pool is smaller

And what everyone wants to here…Home sale prices are expected to rise at a steady pace over the next two years, but it will not be so significant like it was a few years ago in our region.

Wildcards are of course what happens with the election, stock market volatility, further collapse in energy/commodity prices, terrorism, water shortages/natural disasters, and slower growth in China than expected.

If you would like to get the full presentation for the economic forecast, please email me at Sheri@SheriNegri.com.

Information Source:  California Association of Realtors