The Z Group is probably smart to talk in generalities and just spew the usual stuff about next year – higher prices, tight inventory, and less affordability. They even dropped a ‘priced out completely’ about those in the bottom-third-of-incomes category.
One thing they mentioned that the industry needs to stop saying:
“Qualifying for a mortgage can still be extremely difficult.”
The underwriting guidelines are standard, not difficult – one size fits all, and either you fit or you don’t. Buyers can find ways to fit – if you are self-employed, you can stop taking so many write-offs for one year only and get a Freddie Mac loan.
Three Zillow predictions for next year:
- Affordability will be a major issue in the 2016 presidential election.
- Rents will set new records in 2016.
- The consensus of the 100+ experts they surveyed was 3.5% appreciation
There isn’t much any politician can do about un-affordability except give houses away, which I guess is possible. It’s hard to believe anybody could make a solid case that they deserve to be elected because of their housing policy, so I doubt it will come up much.
Rents around the coast will probably set new records next year.
The 3.5% appreciation kick is probably the safest number available, especially if they are talking about a national stat. It will probably range from -5% to +15% depending on the local area, so 3.5% is comfortable.
If there was a housing policy that might work…..
http://www.vox.com/2015/12/23/10657690/seattle-housing-crisis
If you have the means, and want a place to park your money long term to combat inflation, consider acquiring rental properties. New York City has made it unlawful to reject section 8 applications outright. I would venture to guess that cities in southern california will follow suit. Santa Monica already has:
http://smdp.com/council-outlaws-landlord-discrimination-section-8-vouchers/147773
So the trend seems to be shifting a little from government enforced/guaranteed mortgages, to GE/GR rent checks. I would expect roughly the same outcome as the former.
From what I understand, a single section 8 beneficiary can make up to $50,000 a year in monetary “gifts” and still qualify for benefits. I don’t know how much they allow for declared income. I recently read that in NYC, one can make up to $100K and still qualify for full benefits.
Additionally, the mandate for section 8 has changed. In one trial area, beneficiaries are receiving letters telling them they must move into better neighborhoods, or they will have they benefits reduced, and if they move, benefits will increase, so many will be chomping at the bit to move into middle-class areas. As the mandate expands, I would expect it will likely increase rents.
http://www.nytimes.com/2015/07/08/business/economy/housing-program-expansion-would-encourage-more-low-income-families-to-move-up.html
All this has not gone unnoticed by those who can be helped by this plan.
http://losangeles.cbslocal.com/2015/09/21/thousands-line-up-for-section-8-housing-in-norwalk
While the housing market looks good, 2016 might the year of the rental property, imo…
Maybe not so much SD but in LA most of the really good Jobs are IN the suburbs.
Newbury park ca, West-Lake, Simi-valley etc…