The West Side real estate market remained strong in 2016 but showed signs of moderating, according to several industry professionals.
The final quarter of the year saw an increase in the inventory of existing homes on the market, and interest rates began to ratchet up as well.
Price appreciation continued, said JoAnna Lafler of Lafler Real Estate in Gustine, but not at the rate of prior years.
“It has been a good year, with a lot of buyers and sellers with multiple offers,” Lafler commented. “We saw some price appreciation, but I think there was a bigger increase (in 2015 than in 2016).”
Lafler, Bill Mattos of Valley Real Estate in Gustine and Jose Rodriguez with Allison James Estates and Homes in Newman, agreed that finding a home in good condition priced under $200,000 grew increasingly difficult in the past year.
The market remains most active for homes in the $200,000 to $250,000, they indicated.
All three agreed that trends point to the market continuing to moderate in the year ahead - but said that all indications still point to solid demand continuing for well-priced homes in good condition.
“This year (2016) was not as busy as last year, but it was still solid. We have had some good years, but I believe we have reached a plateau. I don’t foresee the market taking off any more or dropping substantially,” Rodriguez commented. “I think 2017 is going to be steadier. It might be more predictable.”
“If it is priced right it will sell,” Mattos agreed. “That is how it always has been.”
Future market demand could come from various sources.
Mattos said he believes the region will continue to see strong interest from out-of-town buyers looking to the West Side for relatively affordable home prices.
The rental market plays a role as well, Rodriguez pointed out.
“Every time there is an increase in rental costs, it helps get the (prospective) buyers off the fence. They decide to go purchase (instead of continuing to rent),” he said.
Rodriguez emphasized, though, that prospective buyers must be fully prepared before jumping into the market.
Lenders have established extremely strict criteria which buyers must meet to be pre-qualified, he said.
“There are still a lot of buyers out there who don’t seem to believe that. You really have to stress to them that the guidelines must be met, or they will not be qualified,” Rodriguez explained. “The buyer has to be fully qualified and go in with an offer and a loan. Sellers are not waiting. They want to go right now.”
Growing inventory is not the only factor impacting the market.
Upward pressure on interest rates will factor in as well, the real estate professionals agreed.
“If rates climb, it will not stop the market from being active, but there may not be as many multiple offers and it could kind of put a lid on appreciation,” Lafler commented. “If a house is on the high end, some people who were right on the cusp of (affordability) might get knocked out.”
While interest rates may have an impact, Mattos pointed out, “the rate is still historically low.”