In these days of constantly increasing concerns about everyone’s future and how to get the best return on every Dollar invested, you’d have to admit that a net gain of 10% per year is pretty good. The question is “How can I get that?” Well, the answer very well may be the house you live in. Real estate statistics firm Core Logic indicates that an annual increase of ten per cent may very well be achievable by 2018. Interested? Read on.
California home prices rose by 5.8 percent year over year in May and are projected to grow by 9.7 percent by next spring.
- U.S. rents rose by 3.1 percent on an annual basis in May, further eroding affordability.
- Although home values throughout most of the Bay Area are currently considered normal, most are projected to be overvalued by 2022.
Golden State homes should appreciate at almost double the national rate by next spring, though price growth and increasing rental costs do not bode well for affordability.
CoreLogic’s latest Home Price Insights report says that U.S. home prices rose by 6.6 percent from May 2016 to May 2017. California home prices grew by 5.8 percent in that time period, while the San Francisco core-based statistical area saw 4.6 percent annual appreciation.
Single-family rent inflation grew by 3.1 percent year over year in May, a reflection of constrained housing inventory and yet another obstacle for those hoping to enter the housing market while mortgage rates remain historically low.
“For renters and potential first-time homebuyers, it is not such a pretty picture,” CoreLogic President and CEO Frank Martell said. “With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”
Housing affordability is already a national problem, dropping to a near nine-year low in the second quarter, according to a recent report from ATTOM Data Solutions. That analysis said that home prices grew faster than wages on an annual basis in 87 percent of U.S. housing markets, including most of the Bay Area.
California’s affordability problem is unlikely to improve in the coming year if CoreLogic’s forecast is accurate. The HPI calls for 9.7 percent home price appreciation through May 2018, compared with 5.3 percent appreciation nationwide.
Although the Bay Area has some of the nation’s priciest homes, most parts of the region are still considered to be valued normally. CoreLogic says that the San Francisco, Oakland, San Jose, Napa, and Vallejo CBSAs had normal home values as of May. San Rafael is currently considered undervalued, while Santa Rosa is overvalued.
Looking ahead, CoreLogic expects that homes in the San Jose, Oakland, Napa, Vallejo, and Santa Rosa CBSAs will be overvalued by May 2022. Home values in San Francisco and San Rafael are projected to remain normal over the next five years.
Buyers: Got your Pulse up? Want to jump on the bandwagon? Call us!
If you’re a Seller, we can help you as well. Remember: if someone out there is looking for a home, someone has to be selling to satisfy the buyers’ wants and needs. Why not you?
You know the numbers: Peter: (415) 279-6466; Jane: (415) 531-4091. We’re here to help!