The Oakland housing market has generated a slew of headlines over the last year or so, mainly the result of fierce competition and rapid home-price gains.
While prices are expected to continue rising to some degree in 2017, the market could be headed for a cooldown. This is based on a 2017 Oakland housing market forecast issued by Zillow and other sources.
Oakland Housing Market Forecast for 2017
According to the real estate analysis firm Zillow, home prices in Oakland, California rose by a whopping 11.9% between November 2015 and November 2016. This should come as no surprise to those who actually live in the city, given all of the media coverage. By many measures, Oakland was one of the hottest housing markets in California during 2016.
According to a Bloomberg article published back in August of this year:
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“Oakland is the hottest residential real estate market in the Bay Area,” said Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. “It’s still expensive, but it’s more affordable” [than San Francisco].
Looking forward, however, the forecast for Oakland’s housing market in 2017 suggests a much slower rate of appreciation. Zillow, for instance, has predicted a home-price increase of only 2.6% for the 12-month period ending in November 2017. That’s compared to a gain of nearly 12% during the previous 12 months.
This is actually a good thing. Home prices in this market need to slow down to more sustainable levels. For many people, including economists and future home buyers in the area, a slowing of home price appreciation would be welcomed at this point. It would be a return to normalcy and sustainability.
A Real Estate Slowdown Ahead?
The predicted slowdown in Oakland home prices is part of a broader, nationwide cooling trend, according to housing analysts and economists. In many U.S. cities (though not all), house values are expected to rise more slowly in 2017 compared to the last year.
According to Daren Blomquist, senior vice president of ATTOM Data Solutions (which owns RealtyTrac.com), home sales could decelerate next year as well:
“Based on bellwether markets across the country, where sales volume has been decreasing often for several months, I would expect sales volume nationally also to slow down in 2017,” Blomquist said.
Mortgage Rates Inching Upward?
Rising home prices are one concern for future home buyers in Oakland. Rising mortgage rates are another. While 30-year mortgage rates have been hovering below 4% (on average) for most of 2016, they are expected to rise gradually in 2017.
When this article was published, in November of 2016, the average rate for a 30-year fixed mortgage loan was 3.57%. That was based on the weekly survey conducted by Freddie Mac. Analysts with the Mortgage Bankers Association (MBA) expect that average to rise to around 3.7% by the end of this year, and climb above 4% during 2017.
Here is MBA’s quarterly forecasts for 30-year loan rates, from their November forecast:
- Q1 2017: 3.9%
- Q2 2017: 4.1%
- Q3 2017: 4.3%
- Q4 2017: 4.4%
Should I Buy a House in Oakland?
If you’re in the market to buy a house in Oakland, you might benefit from doing it sooner rather than later. While home prices are expected to rise more slowly in 2017, they will most likely continue rising to some degree. So buyers who postpone their purchases until later in 2017 could end up paying more for a home.
Additionally, experts anticipate that mortgage rates will rise gradually over the coming months. This, combined with rising house values, could erode your buying power and make it harder to afford a suitable home. So the case could be made for buying sooner, rather than later.
Of course, all of this is based on forecasts for the Oakland housing market, and such forecasts don’t always pan out. But it’s worth considering.
Disclaimers: This article includes predictions for the Oakland, California real estate market in 2017. Such forward-looking statements were provided by third parties not associated with our company. We have simply compiled them here, and added our own commentary, for the benefit of our readers.