Housing Outlook 2017: Eight Predictions From The Experts

Discover eight things housing experts expect to see in 2017 below.

In so many ways 2016 was an unprecedented, volatile and, for some, excruciating 12 months. And the housing market was not immune to the year’s whims. At the start experts anticipated a pick up in building activity, instead builders are still not producing enough homes. Meanwhile, home prices appreciated beyond expectations and mortgage rates toyed with record lows before crossing 4% for the first time in two years. 

Here are eight things housing experts expect to see in 2017:

1. Prices will continue to rise--but more slowly. 

Prices rose every month last year (through October) with the largest gains coming in the later half and a 5.61% increase in national. Experts expect prices will continue their climb, but gains will slow. "We believe price increases will hold steady despite slowing sales growth, because homebuyer demand is stronger now than it was at the same time last year, and because we foresee a small uptick in homes for sale," notes Nela Richardson, chief economist at real estate brokerage Redfin.

2. Affordability will worsen. 

Wages are expected to grow in America's big cities this year, but the share of homes affordable to someone earning the median income is not. This trend, which has stymied many aspiring to buy their first home over the past few years, will be intensified by a continued shortage in low- to moderate-priced inventory and rising mortgage rates. "The irony of the modern housing market is that the places where we are seeing wage growth are places where people can't live because they are too un-affordable. There is a mismatch," says Nela Richardson, chief economist at real estate brokerage Redfin.

3. Mortgage rates will be volatile. 

In December 2016, the Federal Reserve bumped short term interest rates o between 0.50% and 0.75%, the second hike in a decade. The 25 basis point move left rates low by historic standards and on did not have a huge impact on mortgage rates. However, the Fed's policy makers indicated they anticipate three hikes in 2017, which could have a larger effect. That's up from the two officials projected before Donald Trump was elected. That said, Fed projections can be taken with a grain of salt: they also originally thought they would hike three times in 2016.

4. Credit availability will improve--maybe. 

By and large early Trump administration priorities are not expected to deal directly with housing. However, the president-elect and his team have made it clear that they hope to roll back much of the post-crisis financial regulation laid out in the Dodd-Frank Act. In theory, this could open up banks to lend more freely to wide-range of would be buyers.

5. Supply will improve but remain short. 

Declining inventory was without a doubt the defining feature of the housing market in 2016. It led to price appreciation, as well as a hyper fast market for buyers and discouraged would-be-sellers who feared entering the buying fray. A complete turnaround is unlikely in 2017, but there are some signs the coming year could see a small bump in housing supply--at least on the new home front.

6. More Millennials will become homeowners--and renters. 

According to Zillow half of all buyers are under age 36. Not every economist agrees with this assessment, however it is clear that Millennials will continue to make up a large and growing portion of the buyer pool. Of course much of this is due to the fact that Millennials--adults born after 1980--are now the largest adult generation and make up the greatest percentage of the workforce. Redfin expects Millennial homebuyers will move from the coasts to "inland markets" where starter homes are more affordable.

7. Competition will grow fiercer.

In 2017 sellers will maintain the edge over buyers as demand is expected to increase. In 2016 the typical homes stayed on the market for just 52 days, about a week faster than in 2015 and the fastest year since Redfin began measuring in 2009. The brokerage expects 2017 to be even faster.

8. Political uncertainty will be replaced with policy uncertainty. 

Experts agree that three of President-Elect Donald Trump's policy priorities could meaningfully impact the housing market: his pledges to spend more on infrastructure, to cut taxes and to crack down on immigration. The consensus is that in the very short term any moves in these three ares could have a neutral-to-positive impact on the housing market. Over the longer term, however, opinions vary widely. 

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Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

Millennial Buyers Want More (Not Less) Square Footage

A recent Trulia study revealed that millennials aren't ready to ditch their creature comforts and downsize. When it comes to dreaming of a new home, they're dreaming big.

A recent Trulia study revealed that millennials aren't ready to ditch their creature comforts and downsize. When it comes to dreaming of a new home, they're dreaming big.

A recent Trulia survey shows that 20- and 30-somethings crave space to roam at home.

When it comes to millennials, minimalism is in — from “norm core” fashion on the runways (see: fanny packs and “sensible” shoes) to the tiny-house movement, as parodied on a recent episode of Portlandia.

So to find out what’s trending when it comes to square footage, Trulia surveyed more than 2,000 people across multiple cities, lifestyles, and generations — and the results for millennials surprised us.

Despite the fact that 20- and 30-somethings are typed by “simple-ing down” everything from how they dress to how they invest, more than any other generation, the numbers reveal that they’re not ready to ditch all of their creature comforts just yet.

Millennials are generally dreaming of bigger — not smaller — places to live.

Yes, this generation has been statistically shown to be more eco-focused (and carbon footprint–conservative) than its predecessors.

But Trulia Housing Economist Ralph McLaughlin may have said it best in a recent article about housing-size preferences: Even environmentally conscious millennials aren’t immune to wanting more elbow room at their tables.

According to McLaughlin, “They’re looking to move on up by a big margin: just over 60% told us their ideal residence is larger than where they live now — the largest proportion among the generations in our [multigenerational survey] sample.”

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Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

Neptune Marina

Scheduled for completion in summer 2018, Neptune Marina’s clean, linear design is inspired by the era in which Marina del Rey was established.

Detailed renderings for Legacy Partners’ Neptune Marina apartment community were unveiled by TCA Architects, bringing a timeless mid-century modern aesthetic to the heart of Marina del Rey, CA. Located on Marquesas Way, between Basins A and B, the under-construction multifamily community includes 526 contemporary apartment homes with picturesque harbor views and a new marina with modern boater facilities, announced Tim Mustard, Studio Director and the architect of record at TCA Architects. 

 
 

Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

Neighborhood spotlight: Mar Vista

Ninety years ago, Mar Vista was little more than vast fields of lima beans — with an amazing view of the Pacific. Today, those ocean views have helped Mar Vista evolve into one of L.A. most desirable Westside neighborhoods, with skyrocketing property values to prove it.

The town can thank the storied Venice Short Line trolley for its rise. That trolley shuttled passengers from downtown Los Angeles and bisected what was then called Ocean Park Heights. The rapid development of Santa Monica and Venice Beach helped launch the first wave of housing tracts to rise up from the dusty fields. By 1927, the thirsty little farming community had been annexed by water-rich Los Angeles and rebranded Mar Vista, after the name of a nearby trolley stop.

It's a place of tension between old and new, where large modern homes strain against prewar property lines and traffic pushes to capacity many streets originally designed to accommodate horse-drawn carriages.

Neighborhood highlights

Mar Vista Tract: Designed by Midcentury Modern architect Gregory Ain, this 52-home development aimed to infuse postwar housing for the new middle class with modern design elements. Remarkably, all of the homes still stand, and driving into the well-preserved neighborhood is like turning back the clock to the boom years of the late 1940s.

Mar Vista Hill: 

Towering 200 feet above the basin, this historic mesa boasts killer ocean, city and mountain views. The hill also plays host to the North Venice Little League park and Ocean View Community Garden, which occupy a site that has been — in succession — farmland, city dump, antiaircraft artillery battery and the proposed site of an L.A. Department of Water and Power reservoir. Some of the oldest homes in Mar Vista line Grand View above Venice Boulevard.

The Venice/Grand View Historic Commercial District: 

Mar Vista's historic "downtown" contains buildings built between 1924 and 1960 (including the original Mar Vista Library) in a wide variety of styles. You can find tattoo parlors, hand-brewed coffee and the weekly farmers market.

Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

Buoyed by Silicon Beach, Westchester enjoys a housing surge

When Regina Freidin first moved to Westchester about 15 years ago, it wasn't exactly her first choice.

Her husband had grown up in the quaint, suburban neighborhood just north of LAX and wanted to move back. She grew up in the San Fernando Valley and had in mind someplace more trendy. They had been renting in Brentwood.

"It's not like there's a stigma," she said. "But you know how if you live in the Palisades or Brentwood or Santa Monica, people are like, 'Ooooh.' Well, Westchester is just Westchester."

But 15 years and three Westchester houses later, Freidin says she wouldn't want to live anywhere else. And she has friends hoping to move there too. Even one from Brentwood.

This often-overlooked patch, known to many as a place they pass through en route to the airport, is having something of a moment.

Westchester's 90045 ZIP Code is one of just a handful of places in the region where house prices have returned to pre-crash levels, with the median price for a single-family home hitting $795,000 in the third quarter, according to CoreLogic DataQuick.

Those prices have climbed 25% in the last two years. A big reason: the southward surge of Silicon Beach.

The tech and real estate phenomenon that has transformed Santa Monica, Venice and Marina del Rey is now lapping at the edges of Westchester. Media and entertainment firms have been scooping up office space in Playa Vista, a master-planned community on the old Hughes Aircraft site just north of Westchester. Last month, tech giant Google bought 12 vacant acres zoned for a massive office complex.

"All these tech and advertising companies have really shifted the dynamics of the marketplace," said Stephanie Younger, a real estate agent with Teles Properties in Playa del Rey.

A wave of rehabs and additions has also driven prices higher. Construction crews are a common sight in Westchester these days, converting the neighborhood's traditional postwar ranch homes — built in the '40s and '50s for returning GIs and aerospace workers — into fully updated two-story affairs.

Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

Google buys 12 acres in Playa Vista, vastly expands presence in L.A.

The tech titan, GOOGLE, has spent nearly $120 million on 12 vacant acres next to a historic hangar where aviator Howard Hughes built his famous "Spruce Goose" airplane in the Playa Vista neighborhood near Marina del Rey. The land is zoned for nearly 900,000 square feet of commercial space that could house offices or studios, vastly more room than Google now occupies in a handful of buildings in Los Angeles County.

Google is also expected to lease the Hughes hangar built in 1943. The 319,000-square-foot building has recently housed soundstages for movie and television production.

"This is phenomenal news for the Westside and for the Los Angeles economy," said City Councilman Mike Bonin, who represents the Playa Vista area. "It really makes and brands Playa Vista as the tech and innovation capital of Los Angeles."

The Mountain View, Calif., company wouldn't detail its plans. But if Google is to develop the land as zoned, the Playa Vista site and the Hughes hangar could be home to as many as 6,000 well-paid, highly educated workers. Internet firms such as Google commonly set aside about 200 square feet per employee.

Local entrepreneurs and investors say they're excited about the possibilities that a stepped-up Google presence could bring.

More Google offices mean more quality engineers, many of whom may eventually launch their own ventures in Los Angeles, which in turn will lure more investors and more developers, said Paige Craig, a prolific angel investor who lives in Venice. That self-perpetuating cycle will boost the tech economy, he said.

"The real key to this is Google is going to attract talented people to come to L.A.," Craig said. The deal also underscores the region's growing influence as a breeding ground for new forms of digital entertainment. 

That's especially important as the technology and entertainment sectors continue to converge. These days, companies such as Amazon.com Inc. are churning out original programming, celebrities are launching their own gaming apps, and Apple Inc. recently spent $3 billion to acquire Beats, which included its online music streaming service. Playa Vista has become a major hub of innovation in recent years. At first, the neighborhood's appeal largely stemmed from its location near major freeways, the Westside and Los Angeles International Airport. Now a vibrant community encompasses media companies, ad agencies, start-ups and established titans.

 

Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

LAX-Adjacent Westchester is Getting Super Popular and Pricey

 

The neighborhood best known for sitting next to LAX is seeing a surge in interest, a lot of it from people looking for a single-family living situation who have been priced out of nearby Venice or Santa Monica, according to the LA Times. A local real estate agent sums up the 'hood's appeal: "You can have a lot more house for your money. You can get a single-family home and good-sized yard." What about those airplanes, though?

The area's been rising strong for at least a couple years. Housing prices in Westchester havegone up 25 percent in the last two years, and in the third quarter of 2014, the median price for a single-family house hit $795,000. It's becoming more common for houses to sell for more than $1.5 million, though the top of the area's market sits at about $2 million. As one Westchester resident tells it, the neighborhood is so hot, even people from Brentwood are hoping to move in. Brentwood!

Those high prices are usually commanded by newer houses, so a lot of the older stock in Westchester is getting razed. Many of the 1940s- and 1950s-era one-story houses are being replaced by "fully updated two-story affairs" with open floor plans. But there's yet to be the kind of anti-mansionization uprising that other Westside 'hoods have seen. "There've been a few homes that have popped up and they really kind of max out the lot, but it hasn't gotten bad," says the president of the Westchester/Playa neighborhood council.

 

Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).

How Google Has Radically Gentrified Venice's Lowkey Rose Ave

 

For years, Abbot Kinney has been the epicenter of Venice's extreme gentrification, but now that it's completely glutted with high-end chain stores, attentions have turned to more lowkey Rose Avenue to the north. The street will lose a couple long-time anchor businesses soon, and locals see it as a pivotal point for the avenue, one signaling its full transition from edgy old Venice to fancy, wealthy new Venice. Ten years ago, Rose was "kitschy at best and dumpy at worst," the LA Business Journal says, but like so much of Venice, it's really been changed by an influx of money that began after tech companies and their employees began moving in.

Rose Avenue's transition has been underway for a few years now. A Whole Foods opened in 2008, but many feel that a later addition made more of a difference: in 2011, Google moved intothe Binoculars Building just south of Rose, bringing with it lots and lots of tech employees and their tech money. In 2012, a shiny new mixed-use housing complex went up on the Pioneer Bakery property at Rose and Fifth, vacant since the bakery closed in 2006. The complex's street-level retail includes a juice place, a yoga studio, and a Café Gratitude, where dishes have names that are affirmations ("I Am Magical," "I Am Warm-Hearted")—in other words, the three horsemen of the gentrification apocalypse. And things haven't slowed down since. Just recently, local mainstay Rose Café was bought by restaurateur Bill Chait and rebranded The Rose; at least one more new eatery could be on the way too.

Back in 2012, noticing the shift underway, the LA Times concluded, "Urban planners say Rose Avenue is unlikely to become the next Abbott Kinney ... but the breakneck pace of change along these once shabby blocks connecting Lincoln Boulevard to Pacific Avenue suggests that the down-and-out bohemian days of this countercultural beach neighborhood are numbered."

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Laura Kellam

Laura has held her California real estate license since 2001, and she began her personal endeavors in real estate in 1996, as a single-family residential investor.  Well-versed in the Los Angeles market, Laura’s 20 years of experience as a buyer, a project manager during renovations and a seller throughout numerous single family residential transactions, and now in recent years, her additional and vast experience working with buying, selling and investor clients; all gives her a unique ability to service her clients needs. Laura treats each transaction with attention to detail and a complete understanding of both the excitement and the challenges of preparing, buying and selling a home. This experience allows her to achieve maximum results for her clients in a way that is as stress free as possible for the client.

Laura currently works with BERKSHIRE HATHAWAY HOMESERVICES, CALIFORNIA PROPERTIES, and holds active membership California Association of REALTORS® (CAR) and the Beverly Hills/Greater Los Angeles Board of Realtors® (BHGLAR).