Silicon Valley Real Estate Market December 2024

Post-Election Real Estate Market Update

In the wake of the recent presidential election, the real estate market has experienced a surge in activity. With the election results now settled, buyers seem to have gained a clearer perspective on the future, more confident in making home purchase decisions.

Market Performance and Tax Strategies

Since 2012, the housing market has seen strong performance, especially in the South Bay area. Homeowners in this region have accumulated an average of $1.5 million in equity. This highlights the critical role of tax sheltering strategies in sustaining market growth.

Emerging Challenges

Anticipated changes in immigration policies and tariffs are expected to influence the market. Rising costs for materials and labor are on the horizon, while wages are not keeping pace with the appreciation of property values.

On a national scale, 35% of homeowners are mortgage-free, and 75% of those with mortgages benefit from rates below 4%. The trend of aging in place is driving demand for multi-generational properties, with Accessory Dwelling Units (ADUs) experiencing a 15% growth, projected to continue through 2025.

Market Outlook

Lawrence Yun, Chief Economist of the National Association of Realtors, forecasts that interest rates will hover around 6% in 2025. Although the Federal Reserve may cut rates twice next year, mortgage rates have not mirrored these reductions.

Yun does not anticipate a recession, predicting a 9% rise in home prices next year and approximately 4.5 million transactions.

Currently, the National Association of Realtors has around 1.5 million members, with predictions up to 300,000 may exit the industry next year, as noted by Brian Buffini. This shift could enhance the average professionalism among full-time real estate agents.

Resources Available

If you have any questions or require real estate resources, I am here to assist. I am part of a National Professional Network that includes very seasoned Realtors, Attorneys, CPAs, Financial Advisors, and more.

Below are charts for US home inventory since 2011, Stats for Santa Clara and San Mateo counties for last 24 months. Stats for other areas are available upon request.

Santa Clara County
last 24 months

San Mateo County
last 24 months

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