The predictions for 2017 are all over the board with regard to the economy and the housing market in particular. While major variations always exist, this year the predictions vary more widely because of two major factors. First, we have a new administration being installed and we still don’t know what policies will change and how these new policies will affect the economy. We do know that a new administration always promises change and we can anticipate these changes, but it surely makes the prediction game more interesting. Secondly, interest rates have been rising since the election. We don’t know if these increases will hold and whether they will continue. Even though rates continue to be historically low, we don’t know how higher rates will affect the economy in the long-run.
Certainly, predicting the future is always a hit-or-miss game. For example, just about everyone predicted higher rates for 2016. Even the Federal Reserve Board said they anticipated raising short term rates several times. Looking back, this increase in rates never took place. Thus, if the Fed can’t predict the future even a few months out, then we don’t expect that market analysts will fare much better. Remember that there are always intervening variables that can affect the future. These variables can and have included natural occurrences, political events, the economics of foreign nations, or even instances of terror.
If you look back at 2016, we had the Brexit event. But looking further back, we have had intervening events such as a Tsunami, wars and many international incidents of terrorism. While we hope that these types of events do not reoccur, when dealing with an entire world of possibilities, we do know they are possible. Thus, while many market analysts are making predictions such as higher interest rates, a continuation of the stock rally and moderating housing growth, we must understand that no one has a handle on the future. Higher rates and moderating housing growth seem to be the consensus opinion, but there is always wiggle room in the prediction game.
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A balanced market = neither a seller or buyer advantage is defined as
160 days worth of inventory.
This month, I will give you a snap shot of the market At 2016 consumption rate in each price bracket, active inventory in each bracket broken down into Day’s worth of “active” inventory (Not market days to sell).
The shortage of inventory today, is properties under $600,000.
Sold properties under $600,000 made up 76% of the sold’s in 2016. Today the actives under $600,000 makeup 61% of the active properties.
Properties Over $1,000,000 made up 2% of the sold’s in 2016. This price range makes up 11% of the activities.
95+% of the sold properties in 2016 were Regular or equity sales. Short sales were 3% of the total sold properties. 2% were a combination of bank owned and probate sales.
|• $200,000 or less||~20~day’s|
|• $200,001 to $300,000||~30~day’s|
|• $300,001 to $400,000||~28~day’s|
|• $400,001 to $500,000||~28~day’s|
|• $500,001 to $600,000||~36~day’s|
|• $600,001 to $700,000||~93~day’s|
|• $700,001 to $800,000||~58~day’s|
|• $800,001 to $900,000||~55~day’s|
|• $900,001 to 1 million||~97~day’s|
|• Over $1,000,001 ++||~180~day’s|
2016 Year End Break down of specific areas of Santa Clarita
• Canyon Country has 46 day’s worth of inventory at 2016 consumption rate for this area. 84% of the sold properties in 2016 were under $600,000. Under $600,000 active properties make up only 59% of the actives
• Castaic has 35 day’s worth of inventory at 2016 consumption rate for this area. 84% of the sold’s in 2016 were under $600,000 & 74% of the active properties are in this range.
• Newhall has 26 day’s worth of inventory at 2016 consumption rate for this area. 83% of the sold properties were under $600,000. Only 61% of the actives are under $600,000
• Saugus has 38 days worth of inventory at 2016 consumption rate for this area . 76% of the sold properties were under $600,000. 58% of the actives are under $600,000
• Stevenson Ranch has 41 days worth of inventory at 2016 consumption rate for this area. 40% of the sold properties were under $600,000. 16% of the actives are under $600,000. 25% of the sold properties were over
• Valencia Westridge 91381 has 64 day’s of inventory at 2016 consumption rate for this area. 45% of the sold properties were over $800,001. 22% of the sold properties were over $1,000,001 +
• Valencia 91355 has 34 day’s worth of inventory at 2016 consumption rate for this area. 80% of the sold properties were under $600,000. 8% of the sold properties were over $700,001.
• Valencia 91354 has 19 day’s worth of inventory at 2016 consumption rate for this area. 68% of the sold properties were under $600,000.
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