We are well past the halfway point for 2016, which means that some Concord home buyers are already looking ahead to 2017. And many are asking the same questions: Should I buy a home in Concord, California now, in 2016, or should I put it off until 2017? What might I gain or lose by waiting until next year? What will the real estate market be like three, six or nine months down the road?
Unfortunately, nobody can predict future housing conditions with 100% accuracy. But there are some things you should know in order to make an informed decision. Here are three things to consider about buying a home in Concord in 2016 versus 2017.
Buying a Home in Concord, CA: 2016 vs. 2017
If you buy a home in Concord, California in 2017, as opposed to this year, you could end paying more. That’s because house values in the area have been rising steadily in recent months, and they could continue moving north over the coming months. Mortgage rates are expected to rise through next year as well, but at a gradual pace.
Here are three more things you should know about buying a home in Concord, whether in 2016 or 2017.
1. Bay Area home prices are now higher than ever.
Home prices in the Bay Area are now higher than they’ve ever been before — even during the housing bubble. This is true for the Concord real estate market as well. According to the real estate information company Zillow, home values in Concord, CA rose by 7.6% from August 2015 to August 2016 (when this article was published). Trulia reported an even larger gain of 14% for the median sales price, during roughly the same time frame.
Regardless of which source you look at, the overall trend is clear. Home prices in Concord have risen sharply over the last couple of years.
So that’s the first thing local home buyers should know. When buying a house in Concord in 2016, you’ll pay more than someone who purchased last year.
But what about next year? What if you postpone your purchase until 2017? Well, you’ll probably pay even more for a house. That’s because prices are expected to continue rising through the end of this year and into next (though they might level off to some degree). And that brings us to the next consideration.
2. Concord home prices could level off in 2017.
Let’s face it. The entire Bay Area real estate market could benefit from a cooling period. Home prices in the region have skyrocketed in recent years. This has created affordability problems for would-be home buyers in many cities in the region, including Concord.
The good news, from a buyer’s perspective, is that house prices in the area are expected to level off and rise more slowly in the months ahead.
The economists at Zillow, for example, have predicted a significant reduction in price growth for the city. In August they posted the following on their website: “Concord home values have gone up 7.6% over the past year and Zillow predicts they will rise 0.7% within the next year.”
Granted, this is just one forecast, and it’s based on market conditions that change constantly. Still, the folks at Zillow clearly expect home-price appreciation to level off between now and this time in 2017.
View forecasts for neighboring areas:
This mirrors the outlook for the entire nine-county Bay Area. The general consensus among housing analysts is that home values will rise more slowly in the months ahead, compared to what we’ve seen over the last 12 to 18 months.
3. Mortgage rates are predicted to inch upward through 2017.
Mortgage rates are another important consideration when deciding when to buy a house, at least for most buyers. (Cash buyers are a different story.) We talked about the threat of rising home values already. But what about mortgage rates? The consensus among economists is that rates will inch upward between now and 2017.
We wrote about this in a previous article. See: Mortgage rate forecast for Bay Area buyers.
Earlier this week, Freddie Mac reported the latest results of its weekly mortgage market survey. The average rate for a 30-year fixed home loan rose slightly to 3.45%. Thirty-year rates have been hovering below 4% all year, and a lot of Concord home buyers have taken advantage of this. But rates could rise over the coming months, due to a variety of economic factors.
For instance, the Mortgage Bankers Association (MBA) recently predicted that 30-year rates would rise gradually through the end of 2016 and into next year — perhaps reaching 4.4% by the end of 2017. That would be an increase of about 100 basis points (1.0%) from where we are right now, if the MBA forecast proves accurate.
Buy When You’re Ready
This is just one more data point to consider, when weighing the advantages of buying a home in Concord in 2016 versus 2017. If home prices and mortgage rates both rise gradually between now and next year, it would make the case for buying sooner rather than later.
The important thing is to buy a home when you are ready. Make sure it’s the right decision for you, and the right time to do it. Buying a house is a major commitment, especially when there’s a mortgage loan involved. So you’ll want to do some soul searching before you commit.
Think about your income stability, your long-term plans, and your lifestyle. Would homeownership improve your life at this point, or take away from it? These considerations are arguably more important than market conditions.
Need a Mortgage Loan?
Bridgepoint Funding has been serving home buyers in Concord and the broader East Bay for many years. We are a local mortgage company, located in nearby Walnut Creek. We offer a wide variety of loan products and programs. Please contact us to learn more about your financing options, or to get a free rate quote. We look forward to helping you!
Disclaimer: This article contains forecasts and projections relating to the Concord, California real estate market in 2016 and 2017. Such statements were provided by third parties not associated with our company. We have compiled them here as an educational service to our readers.