For the first time in nearly a year, declining housing affordability topped lack of inventory as realtors’ number one concern, with 26% stating they were concerned about low housing affordability. However, worries over a tight housing supply were not too far behind, with 19% indicating their concern.
Looking toward 2017, the California realtor community is furrowing its brow at the issue of declining housing affordability, currently stepping into the market news spotlight just in front of inventory shortages. On the broad housing spectrum, according to the National Association of Home Builders, “builders in many markets continue to express concerns about shortages of lots and labors,” but locally, realtors are taking a more narrowed look at perpetually high home values with lack of supply taking a close second. An October report released by the California Association of Realtors summarizes this tandem effect: “California existing home sales ticked up in September on a year-to-year basis for the first time in seven months as a shortage of homes available for sale continues to hold back the market.” Even further, Housingwire.com hangs on the balance predicting that “affordability is only projected to get worse, which is currently California real estate agents’ No. 1 concern for the market.”
While California realtor confidence dips slightly in light of affordability factors, “builder confidence stands at its second-highest level in 2016, a sign that the housing recovery continues to make solid progress,” as expressed by NAHB Chairman Ed Brady. What’s more, a localized look at Southern California’s robust economy offers an even brighter light at the end of the tunnel. Chief Economist for the California Association of Realtors Leslie Appleton-Young affirms, “With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017.” All worries aside, California’s overall economic brawn tempers the tension of some otherwise compromising national concerns.
If you are a potential home buyer in California, fear not! You can still become a homeowner, even in the wake of declining housing affordability. Contact me and we can go over your options together.