A UCR expert predicted that the real estate market for Inland region will be calm this 2016.
Christopher Thornberg, the director of UC Riverside's Center for Economic Forecasting and Development, weighed in on how the Inland market will be this year.
"It'll be nice, and comfortable. There will be no big surprises in 2016," he said.
According to The Press Enterprise, Thornberg said that the worrying is unwarranted.
"I would argue that rather than worrying about real estate going too far, that the conversation should flip to the real issue of what's holding it back," he stated.
Home prices have risen too sharply in several markets, said Lawrence Yun, chief economist at the National Association of Realtors. On Dec. 30, 2015, Yun reported the smallest year-over-year gain of 2.6 percent in pending home sales in November in 13 months.
While local real estate agents have long been claiming that homebuying interest is still strong, prospective homebuyers have found it difficult to find properties that are either move-in-ready or within a moderate cost range.
According to Yun, the decreasing supply levels have gone about as headwinds against the business sector. With inventory conditions slowing down the pacing of house sales through 2015, the market could still face same issues in terms of supply and ongoing price appreciation this year.
The Center for Economic Forecasting predicts that the sales and median price of existing homes will see gains of six to seven percent in each category. New home construction and sales will keep seeing some churn, and that is a function of existing inventories and overall housing demand. Mortgage rates will edge up but at a very slow pace. It might take two years or longer for the rates to reach five percent.
As prices of homes are slowly easing back to 2005 levels in some places, people can hear more banter about affordability in 2016.
"I think the mid-term outlook for real estate is huge," Thornberg said. "The region has the ability to grow almost faster than any other place in California right now, and it will carry the housing market along with it."
The Inland region will likely get more inbound residents since its economy is the strongest in California right now. Furthermore, its economy is predicted to continue to grow this year, which will move incomes up and keep the balance of the real estate sector.
