Interest rates, the new tax plan, inventory levels, and rate increases for both vacancies and rentals will all have a significant impact on our market in 2018.
There are a few factors that will impact how our market performs in 2018 that you need to be aware of.
The first is interest rates. If the Federal Reserve raises interest rates four times like they’re predicting, it will reduce buyers’ purchasing power and reduce the steady price increases we’ve been seeing. With this reduced affordability among buyers, home values may dip a little bit.
The second factor is the tax plan that was approved last December. It will be especially interesting to see how this will affect Californians in the move-over market.
The third and most important factor is the inventory levels. Currently, we have a 1.5-month supply, which means if you’re a buyer, you have to be motivated and ready to write an offer on something you like as soon as you come across it. You might also find yourself in a multiple offer situation, so make sure you work with an agent who’s experienced in that scenario.
Lastly, you have rate increases for both vacancies and rentals. There is very low inventory in the rental market. Back in November 2017, we had the fourth-largest price increase for rentals in the entire country.
If you have any more questions about our market or you’re interested in buying or selling, don’t hesitate to reach out to me. I’d be happy to help you.