■ Matt McPherson / Columnist
A new president has taken the reigns along with a very proactive administration that has completely shifted the direction of the country in its first two weeks.
The DOW recently broke 20,000 and the economy is renewing hope among builders and developers throughout the land.
According to Realtor.com, as we enter 2017 we can expect a year of gradual slowing in the housing market, although moderate growth will maintain as a result of re-emerging new-home sales throughout the country.
In contrast, a changing spectrum of home buyers and a post election interest rate rise might possibly force first time home buyers out of the market.
Nationwide calculations suggest a rise of 3.9 percent in home prices, while property sales are expected to see a 1.9 percent increase. An anticipated rise in inflation will likely result in interest rates around 4.5 percent by summer time. A 10 percent surge among new home sales is also expected, which is based on GDP growth of 2.1 percent.
Daily changes were again common this week for home loan rates, but as we end the week rates are basically the way they were when the week began.”
Another big indicator of what’s on the horizon is the sharp decline among the surrounding high dollar markets. In Temecula, home prices are down 1 percent from last year at this time, while Murrieta has shown zero increase in property value.
Canyon Lake also shows a 1 percent decrease in value from last year at this time. Communities that showed vast amounts of vacancies and abandoned homes due to the recession five to six years ago are now gradually rising upward in value and are drawing first time home buyers, in addition to investors with their size and affordability.
Menifee is up a whopping 14 percent since last year. Subsequently, Sun City is up 15 percent and perseveres while some surrounding neighborhoods have plateaued.
Hemet and San Jacinto persevere as the top markets in Riverside County with one year increases at 14 percent for Hemet and an impressive 15 percent rise for San Jacinto.
The recent decrease in crime in San Jacinto is highly correlated with a significant rise in property values.
As compared to San Jacinto, Hemet has not yet experienced a similar reduction in crime, but still continues to witness a rise in property values predominantly attributed to the weather, proximity to popular destinations, and affordable prices.
Larry Iest, the branch manager at Megastar Financial, says conventional mortgage rates for the week of Jan. 22-29 range from the 3.5 percent up to 4.5 percent, depending upon the type of mortgage selected.
December 2015 – December 2016 Area Price Comparison Review
“Daily changes were again common this week for home loan rates, but as we end the week rates are basically where they were when the week began,” said Iest.
Nationwide, “existing home sales for December were down 2.8 percent from November.
The decrease was mainly due to the continued lack of inventory, which was down 6.8 percent.
This was the lowest inventory level since 1999.
The median home price, which is supported by low inventory, is up 4 percent year over year to $232,200.”
The surrounding communities on the periphery of the San Jacinto Valley are a predictor of what we can expect over the coming few years.
Considering Temecula, Murrieta, and Canyon Springs are high pressure markets that experience the initial flood of buyers and investors, the San Jacinto Valley remains a low pressure market that consistently feels the wave of financial trends from the outlying, more affluent communities.
Considering all of these factors nationally and locally, whether you‘re a buyer or a seller, the real estate market continues to see a rise in activity on both sides. It’s a great time to sell with recent surges in value and equity. It’s also a great time to buy with interest rates persisting around the 4 percent range.
Matt McPherson, 6th Generation in The Valley
Coldwell Banker Associated Brokers.
BRE # 01362837.