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MENLO PARK AND ATHERTON REAL ESTATE MARKET UPDATE  – 2016 VS. 2017 FORECASTED

MENLO PARK AND ATHERTON REAL ESTATE MARKET UPDATE – 2016 VS. 2017 FORECASTED

Silicon Valley’s real estate market is watched closely around the country, so let’s look at how 2016’s fourth quarter fared. As a whole, Silicon Valley’s average home price was down 1.2% in Q4 2016 compared to Q4 2015. Home inventory was 8.4% lower than the previous year, yet December did ultimately finish stronger than expected. For more details, my Q4 2016 report (Silicon Valley and  Q4 2016) dives further into local data points and trends. While speculation as to how 2017’s local home market will transpire versus 2016 is pure conjecture, we can look to classic indicators and current trends for clues.

Certain contributing factors may have some impact to this year’s housing market. First, interest rates have slightly risen. Will they continue to rise? The 30 year jumbo is now around 4.125% and the 5/1 arm is around 4.0%. This could have an effect on home affordability as prices are at all-time highs in Silicon Valley and incomes are not keeping up with home prices. The California job market is projected to stay hot for 2017, with an unemployment rate that continues to fall. Will the restructuring of Dodd-Frank really do what the new administration and banks say it will do? In layman’s terms, the new administration wants to reduce costly government regulations and oversight, which in turn will give consumers more financial choices in the market at lower costs. These laws were put in place to safe-guard markets after the 2008 financial crisis, so it will be interesting to see how this plays out.

In my opinion the local real estate market will remain steady this year as compared to last. With home prices projected to rise around 3% year-over-year through 2019 (per Silicon Valley economist John Burns), a sustained shortage of property inventory, and a robust job market, we will continue to see housing demand through 2017. According to independent local analytics firm Weiss Analytics, the current average price per square foot in Menlo Park is $1,127, up 4.1% from last year and projected to increase 6% this year. Atherton’s average price per square foot is $1,136, down .08% compared to last year, but projected to increase 3% this year.

 

I am committed to helping my clients make informed and intelligent decisions about their most important asset– their home! Clients trust my proven pricing, negotiation and targeted marketing strategies to get them the highest possible price when selling or to get them the home of their dreams at the right price when buying.

If you are interested in learning more about today’s real estate market, or in selling or buying a home, please contact me at david@davidweilhomes.com or 650.823.3855.

*Founded by national housing index expert Allan N. Weiss, co-founder of Case Shiller Weiss, Weiss Analytics combines leading industry experience, proprietary analytics, and vast computing power to deliver these revolutionary solutions. Weiss Analytics is an independent and trusted information source for a wide range of stakeholders in the residential asset space.