For professionals in real estate, one of the most exciting moments of the year might be when Realtor.com publishes its annual National Housing Forecast. This crystal ball looks at a number of important economic indicators to make predictions about what buyers and sellers can expect in the coming year. Though the 2017 forecast notes that national market growth may be slowing compared to previous years, there's also a lot that savvy sellers can learn from about housing trends in Santa Cruz.
According to the forecast, shifting demographics will play a huge role in shaping the real estate market in the U.S. over the next decade. In particular, millennials—a generation of first-time homebuyers—are expected to make up 33% of the national market share in 2017. These eager young people bring with them a different set of values and priorities than traditional homebuyers, and the smart seller will definitely want to approach them on their own terms. Together with baby boomers, who remain the most powerful force in real estate today, millennials are expected to make up the majority of buyers in 2017.
But those looking to sell in Santa Cruz shouldn't overestimate the millennial influence either. CoreLogic, a property analytics provider, revealed this year that our county is actually among the nation's bottom 10 counties for millennial home purchases, largely because the median home price has topped $800,000. Sellers shouldn't ignore this generation, whose buying power is sure to increase with time, but it'd be smart to keep in mind that many younger buyers are still priced out of the local market.
Hot Housing in the West
While the national market may be cooling off in the wake of recent mortgage rate increases, housing markets remain very promising on the West Coast. Realtor.com has identified 11 metropolitan areas in California that will see substantial price gains in the coming year, including nearby Santa Clara, Sacramento, and Los Angeles. The cities on this list are projected to see price growth of 5.8% as well as a sales increase of 4.7%, well above national averages.
Though Santa Cruz slipped from the list of the 100 most promising metros this year, there's still a lot of evidence that the market is thriving here as well. This October, for instance, Realtor.com identified Santa Cruz as offering the 20th hottest listings on their website. Santa Cruz homes received almost twice as many views per month as the US average, so there's a flurry of interest from potential home buyers, even while active listings are shrinking. It's a great time to be selling.
Big Demand for Rentals
In the coming year, the volatile mix of a strong job market and limited development of new housing will continue to grow demand for rental properties. With San Francisco reaching total saturation, it's now common for tech professionals to look for rentals in the urban centers of Santa Clara, Santa Cruz, and Sacramento instead. From the perspective of established buyers looking for investment properties, this trend in rentals means enormous opportunities to make healthy returns.
If you're looking to establish a source of passive income that will carry you into retirement, now is a great time to consider buying to rent. Whether you live locally or not, there are many Santa Cruz homes for sale that would be instantly attractive to desirable renters like professional couples.
With over thirty years in real estate, Lauren Spencer understands how national trends in real estate will shape Santa Cruz County and the surrounding communities for years to come. For informed, professional advice that will help you buy or sell your home, now or in the future, call My Santa Cruz Real Estate at 800-227-4717 today.