As homeowners on the Palos Verdes Peninsula, there are local, national, and global forces affecting our real estate market.
In 2016, the overall market showed that strong and steady wins the race. Values climbed at a healthy, more moderate rate, and mortgage rates hit historic lows.
Sales are slowing in the higher-end market, while lower-priced homes are moving quickly due to tight inventory in that section of the market.
What can we expect in 2017? See my analysis below.
If you are thinking about selling your home in the next 12 months, call me today for your strategic marketing consultation ==> 310-753-1569
We will cover your goals, and my unique approach to getting you the highest possible price in the fewest days on market.
To a prosperous 2017!
Karen Duncan Cutler
Owner & Realtor, Cutler & Cutler Real Estate
The 2017 Short List
With our global economy, and especially as Palos Verdes Peninsula homeowners, there are local, national, and global forces affecting our real estate market.
Here are the top 3 things we will be watching this year:
Mortgage rates are on a steep climb.
As was hotly anticipated, the Federal Reserve meeting in mid-December 2016 confirmed my predictions—mortgage rates are on the rise.
The good news is that we were starting from nearly the historical lowest-ever mortgage rates. That makes this pill an easier one to swallow.
What do higher interest rates mean for the typical PVP real estate transaction?
è For buyers, the bottom line is that increased mortgage rates translate to higher monthly payments.
If you are considering buying a PVP home in 2017, the time to act is now. Find an educated agent who can speak to micro- and macro-level economic trends, get pre-qualified with a lender, and start your home search in the first quarter.
è For sellers, increasing mortgage rates mean a few things.
Demand in PVP, for the foreseeable future, will remain relatively steady. That said, buyer fatigue is real and will start to play out in pockets, leading to a decrease in demand.
Decreased demand means reduced traffic through open houses, fewer offers, and ultimately, a lower sale price.
If you’re considering selling your home in 2017, the time to sell is now. Find an educated, connected agent and start the preparation process to get your home on the market and maximize your sale price.
Why you need to care about China’s GDP and LTD ratio.
All-cash buyers from China make up a significant percentage of luxury markets, especially along the west coast. A central reason for this influx of international buyers over the past 5 years?
China’s banks do not have the same regulations banks in the U.S. do.
As China’s GDP has experienced fluctuations—ironically caused in part due to including real estate in their GDP calculations—banks have had a harder time regulating their loan-to-deposit ratio.
Banks in China have, in some cases, been giving out more loans than they have in deposits. This means that if borrowers default on the loans, the banks can easily fail—meaning the affluent citizens who comprise the majority of the deposits in the bank would lose their assets.
Savvy Chinese investors have been flocking to the U.S. to diversify their financial portfolio.
A complicating factor is that the U.S. owes China over a trillion dollars, adding another layer to this intricate situation.
These are topics to which we will be paying close attention in 2017, especially given the changes in administration.
Incoming administration changes…and PVP real estate.
Politics aside, the incoming administration does carry a high potential for changes that will affect real estate across the nation.
One key topic? We have heard swirlings of rumors that the Frank-Dodd Act is on the chopping block.
Should a repeal or revision come to pass, that has the potential to allow banks to give mortgages to underqualified borrowers as they did back in the early aughts—which was no small contribution to the recession.
As reported by the Case-Shiller Index, home values have only just recovered from the 2007-2008 financial crisis, the worst since The Great Depression.
This is something we will be keeping a close eye on.
Combined with changes in Congress, the new Secretary of the Treasury and Secretary of Housing carry the potential to have great sway in the U.S. housing market as a whole.
Thinking about selling your home in the next 12 months?
Call me today for your Strategic Marketing Consultation ==> 310-753-1569