Silicon Valley Housing Sentiment Survey
Happy February! As you may remember, during the holiday season the Property Nerds created the first Silicon Valley Housing Sentiment Survey. In it, we asked consumers what they thought about the trajectory of the economy, interest rates, and housing prices, specific to the Bay Area. The results were mixed – opinions were all over the map when asked about the strength of the local economy but one thing that all respondents agreed on is that mortgage rates had nowhere to go but up.
What we also found was that Bay Area residents are “bullish” about our housing prices. Why? The answers become clear in the data below.
For question 1, During the next 12 months what do you think will happen to housing prices?
It seems that most people think the Bay Area will continue its upward trend. 60.42% believe that housing prices will go up, 27.08% believe that housing prices will stay the same, and only 12.50% believe that housing prices will go down. We’d like to believe that we will have some more balance in the housing market in 2018 but Silicon Valley’s job growth and lack of housing is insulating us from the cyclical downturn that may start to happen in other areas in the country.
For question 2, What do you think will happen to interest rates in the next 12 months?
We found that 74.47% believe that interest rates will go up, 21.28% believe that they will stay the same, and 4.26% believe that they will go down.
Though we have seen a February adjustment in the stock market, we have already seen a steady uptick in interest rates in 2018. As long as the economy is growing, the fed will have no choice but to gradually increase the cost of borrowing money.
For question 3, What do you think will happen to the economy in the next 12 months?
This is where we received interesting results. Although most people think that housing prices and interest rates will rise, it seems that they are uncertain about how the economy as a whole will behave.
36.17% believe the economy will go up, 36.17% believe the economy will stay the same, and 27.66% believe the economy will go down. This reflects the uncertainty in our country right now. From the new tax policies to foreign policy to who will be in the White House at the end of 2018, this year looks to be a year of volatility and change.
So what is the word on the street on the “front lines” of real estate? We have heard complaints and concerns from our current and potential clients about how the new tax policies affect them, but we haven’t seen a concurrent ebb in the market, except in the luxury properties above $5 million. Will any of these factors help with our supply dilemma and encourage more people to sell their homes? And how will the new tax law affect the supply and demand of housing in the bay area in the long term? We look forward to our future blog posts that will go into depth about these questions from the Property Nerds!