Summary: According to recent home-price predictions for the San Francisco Bay Area, house values in several cities could rise more slowly as we head into 2017.
The Bay Area real estate market has ridden a roller coaster over the last ten years or so. After skyrocketing during the early 2000s, home prices in the area began to plummet in 2007. That was when the housing market crashed. You know that story. House values bounced along the “bottom” for a while and then, in 2012, they began to rise again — rapidly.
Today, as of August 2016, Bay Area home prices are actually higher than they were during the housing bubble. They’ve never been higher than they are right now, as of August 2016.
But there are signs that our red-hot real estate market might be cooling down. Some Bay Area home-price predictions for 2017 are suggesting much smaller gains.
View an update version of this forecast (11/14/16)
Bay Area Home-Price Predictions for 2017
The general consensus among housing analysts and economists is that home prices across the Bay Area will continue rising in 2017, but at a slower pace than what we’ve seen in recent years. And possibly much slower.
The table below shows home-price trends and predictions reported by the real estate information company Zillow. The second column shows how prices changed over the last 12 months (as of August 2016, when these figures were reported). The third column shows Zillow’s forecast for the next 12 months, through the summer of 2017.
|Bay Area City||1-year change |
(Aug. 2015 – Aug. 2016)
(Aug. 2016 – Aug. 2017)
As you can see from this table, the economists at Zillow expect home prices in the Bay Area to rise much more slowly over the next 12 months, compared to the last year. For all of the cities above (and for many others that were not included here), the one-year forecasts were a fraction of the gains measured over the previous 12 months.
These Bay Area home-price predictions suggest that the market is going to cool down in the coming months, at least in terms of appreciation.
Is Our Red-Hot Market Slowing Down?
Some claim the Bay Area real estate market is nearing a plateau, in terms of home values, and that prices will begin to level off as we move into 2017. That’s a plausible forecast. In fact, when this article was published, we were beginning to see a slowdown in real estate sales across the Bay Area.
In August, Andrew LePage, a research analyst for CoreLogic, told The Mercury News: “The market is slowing. Despite really low mortgage rates, there’s just a lot of people who can’t quite afford, or come close to affording, a home in the Bay Area.”
Sales might be slowing, but home prices probably won’t come down anytime soon — at least not significantly. This is largely due to the inventory shortage we’ve seen in recent years.
Tim Colen, spokesman for the San Francisco Housing Action Coalition, told KQED News in August: “We have a really inadequate, anemic supply of housing. That’s going to keep prices uncomfortably, painfully high.”
Disclaimer: This article includes home-price predictions and forecasts for the Bay Area in 2016 and 2017. Such statements were provided by third parties not associated with our company. We have compiled and presented them here as an educational service for our readers.