2016 Year-End Report: What Homeowners Need to Know for 2017

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Dear Neighbor,


As Redwood Shores homeowners, there are local, national, and global forces affecting our real estate market.

In 2016, the market showed that strong and steady wins the race. Values climbed at a healthy rate, and mortgage rates hit historic lows.

Median sale price is up 5.8% compared to 2015, a much more stable increase than what we saw even three years ago. Average days on market are also up, which is to be expected. Some buyers have been priced out of the market, while others are starting to experience “buyer fatigue” after submitting multiple offers.

Despite cooling off from the astronomical growth we saw for a number of years, the market is still quite strong.

What can we expect in 2017? See my analysis below.

If you are thinking about selling your home in the next 12 months, call me today for your strategic marketing consultation ==> 650-773-2226

We will cover your goals, and my unique approach to getting you the highest possible price in the fewest days on market.

To your success in 2017!



Looking Ahead:

The 2017 Short List


Especially as homeowners on the SF Peninsula, there are local, national, and global forces affecting our real estate market.


Here are the top five things we will be watching this year:



» Peninsula home values continue to rise.


Home values have increased dramatically since the 2007-2008 financial crisis, and we have already surpassed the previous high point.

While some predicted the “bubble” could pop, our market has essentially stabilized. We are still seeing gains in home value, without the astronomical, explosive growth we saw even just a few years ago.

There are pockets within the Peninsula that were once comparatively bargains that are quickly becoming up-and-coming areas as demand increases. This is an expected outcome when space is limited.

As a homeowner looking to sell, your top priority is working with an agent who can speak to more than just your home’s ideal list price. Look for an agent who understands market trends as a whole.

Want my tips on selling for the highest possible price?

Get my complete report on the

11 proven strategies for sellers on the SF Mid-Peninsula ==>

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» Mortgage rates are on a steep climb.


As was hotly anticipated, the Federal Reserve meeting in mid-December 2016 confirmed my predictions—mortgage rates are on the rise.

The good news is that we were starting from nearly the historical lowest-ever mortgage rates. That makes this pill an easier one to swallow.

What do higher interest rates mean for a typical Redwood Shores real estate transaction?

==> For buyers, the bottom line is that increased mortgage rates translate to higher monthly payments.

If you are considering buying a Redwood Shores home in 2017, the time to act is now. Find an educated agent who can speak to micro- and macro-level economic trends, get pre-qualified with a lender, and start your home search in the first quarter.

==> For sellers, increasing mortgage rates mean a few things.

Demand in Redwood Shores, for the foreseeable future, will always remain on the higher side. That said, buyer fatigue is real and will start to play out in pockets, leading to a decrease in demand.

Decreased demand means reduced traffic through open houses, fewer offers, and ultimately, a lower sale price.

If you’re considering selling your home in 2017, the time to sell is now. Find an educated, connected agent and start the preparation process to get your home on the market and maximize your sale price.


» Peninsula real estate solutions.


California boasts a top worldwide economy ranked among entire nations, in large part thanks to the boon of development in Silicon Valley.

From already-established hi-tech firms to startups getting a toe hold, the Peninsula attracts talent from around the globe. Add our amazing climate, wonderful cultural experiences and beautiful scenery, and it’s no wonder so many people want to call the area home.

With increasing populations, space comes at a premium, contributing to rising real estate costs.

In an effort to manage the situation, companies like Facebook are working on housing solutions.

We will be paying close attention to legislation and development that works to address the Peninsula’s “space” problem in the coming years.


» Why you need to care about China’s GDP and LTD ratio.


In our local market, international buyers from China comprise a significant percentage of transactions.

The reason for this influx of international all-cash buyers over the past 5 years?

China’s banks do not have the same regulations banks in the U.S. do.

As China’s GDP has experienced fluctuations—ironically caused in part due to including real estate in their GDP calculations—banks have had a harder time regulating their loan-to-deposit ratio.

Banks in China have, in some cases, been giving out more loans than they have in deposits. This means that if borrowers default on the loans, the banks can easily fail—meaning the affluent citizens who comprise the majority of the deposits in the bank would lose their assets.

Savvy Chinese investors have been flocking to the U.S. to diversify their financial portfolio.

Another factor to consider is that the U.S. owes China over a trillion dollars, an additional layer in this intricate situation.

These are topics to which we will be paying close attention in 2017, especially given the changes in administration.


» Incoming administration changes—and SF Peninsula real estate.


Politics aside, the incoming administration does carry a high potential for changes that will affect real estate across the nation.

One key topic? We have heard swirlings of rumors that the Dodd-Frank Act is on the chopping block.

Should a repeal or revision come to pass, that has the potential to allow banks to give mortgages to underqualified borrowers as they did back in the early aughts—which was no small contribution to the recession.

As reported by the Case-Shiller Index, home values have only just recovered from the 2007-2008 financial crisis, the worst since The Great Depression. In our area, values have more than recovered, and have maintained a more stable growth pattern over the past couple years.

Combined with changes in Congress, the new Secretary of the Treasury and Secretary of Housing carry the potential to have great sway in the U.S. housing market as a whole.

This is something we will be keeping a close eye on.

» 2017 will be a “deciding year” of sorts. There is potential for some big changes in the economy and in real estate, especially on a national and global level.



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