NO END IN SIGHT: HOUSING MARKET STILL HAS LEGS, ECONOMISTS SAY

Source: The Orange County Register

After nearly six years of rising home prices, what’s next?

Will 2018 be the seventh year home prices go up? Or the year the market stalls? Will this be the year that tenants get the upper hand over landlords? Or will rent hikes just keep coming?

In other words, will the seller’s market of the past 69 months continue in 2018?

We interviewed 10 economists and reviewed nine forecasts to find an answer to that question. It can be summed up in one word.

Yes.

Yes, home prices and home sales are projected to keep rising in the year ahead, although the gains will be smaller. Yes, the supply of homes for sale will fail to keep pace with demand, fueling more cutthroat bidding wars. And yes, rents will keep rising while apartment vacancies stay near all-time lows.

The economists all cite the same reason: “As long as the economy keeps growing, that’s going to give a push to the housing market,” said Anil Puri, director of the Woods Center for Economic Analysis and Forecasting at Cal State Fullerton.

Southern California home prices are expected to rise at about the same pace as California: 4.2 percent, according to the California Association of Realtors. That would put next November’s median price of an existing house at about $525,000.

Sales have plateaued across the state and region, said California Association of Realtors Chief Economist Leslie Appleton-Young.

“The lack of inventory and affordability are really … keeping a lid on the California housing market,” Appleton-Young said. “We have fewer transactions … today than when we had 10 million fewer people living in California.”

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