2016 Costa Mesa Real Estate Predictions

Happy New Year!! Without any question, my favorite post for the year is this one. The 2016 Costa Mesa Real Estate Predictions are fun to think about, and I have a pretty good track record of past years. I do love looking ahead and trying to figure out the year will shake out.

 

You always ask me at open houses and parties, “how’s the market?” and “should I buy or sell now”?

 

This is my crystal ball – Here we go with my fearless predictions for the year in Costa Mea real estate:

 

1. Prices Will Continue to Creep Up- What???? No way! Yes, way. We have a lower inventory situation at the beginning of the year, and interest rates are still reasonable.

 

2. The Fed Will Raise Rates Again- In tandem with their December 2015 rate hike, Janet Yellen and company will raise rates again by late summer. The economy should be doing just fine, and low rates in the 3% range won’t be anywhere in our future. I would think unfortunately that rates will be in the 4.75% range by the end of the year in 2016.

 

3. Staging is Staying – Staging in homes came back into the market in a big way in 2013-2014, and 2015 was the year it cemented itself. Homes that were staged well sold considerably quicker and for more money than vacant homes. Nearly every flip was staged this past year that I saw.

 

4. The Market Will Take Pause in Late Summer – There tends to be an August swoon in the past few years, and I think this year will show the same trend. I think the market will start to slow gradually this year, and I think agents will start to get very nervous in August as they see things slowing.

 

5. Flipped and Flopped – There has been such a huge trend of flips in the past few years, and that trend will continue. On the flop side though, I think some flippers are going to be buying too high, finding a lack of labor at reasonable prices, and will try selling way, way to high. Then they will have to sell way lower than expected. The once in a while flippers will find their way out of this market, scared that they can’t make the right profit.

 

6. Market Timers Miss – There are lots of people with extra homes in Costa Mesa, or those who want to sell their own personal homes at the highest prices. They have been patiently waiting for the right time to sell, but I think many of them will miss the boat. I think the market will change quickly in late summer, and they will hurry to sell but have missed the high.

 

7. Picky Buyers – As the market takes pause and starts to return to a normal market, buyers will become more picky. They will realize they don’t need to pull the trigger so quickly, and they actually might even be able to negotiate and get a deal this year. They will pull the trigger, but only on the one that is right for them.

 

 

8. Yes, We Will Foreclose on You – The banks are finally in a position to make money – prices are up and equity has returned, but the banks will foreclose on more people this year than they did last year. 2015 saw near 1% inventory of REO homes, and that will increase a bit this year.

 

9. Are You Flipping Kidding Me??? – There will be some absolutely obscene listing prices on homes for people who are flipping and owners who think that there house is worth hundreds of thousands of dollars more than their neighbors sold for last month.

 

10. Finding Balance – I think more than anything, by the end of 2016 the market will have an increase of inventory, buyers will have slowed their pace, interest rates will be up, and the market will need to find a happy medium. Will prices go down? I don’t see that – I think we will level off and get back to a more normal market.