November 16, 2017

Key Takeaways From Pacific Union’s Real Estate and Economic Forecast to 2020

Pacific Union Chief Economist Selma Hepp offers a wrap-up of key points discussed at our exclusive Bay Area Real Estate and Economic Forecast to 2020, which was held on Nov. 15 in San Francisco.

Yesterday, Pacific Union held its fourth annual Real Estate and Economic Forecast in partnership with John Burns Real Estate Consulting to project Bay Area activity through 2020. Below are some key, high-level takeaways from the live event. To watch the full one-hour presentation, click here.

  • Most U.S. housing markets remain at low-to-normal risk levels, both in the short term and the medium term.
  • Mortgage rates are projected to grow by about 80 basis points by 2020, increasing annually at about a 20 basis-point pace.
  • Across the Bay Area, housing markets are generally at normal risk, though San Francisco and Silicon Valley show some sings of above-normal risk due to a lack of affordability. While there is no evidence of a tech correction, if one occurs, these two markets would see their risks increase.
  • Employment growth remains steady, though the increasing share of jobs in lower-income groups does not bode well for affordability in the Bay Area, especially in Sonoma and Napa counties.
  • Proposed tax changes could significantly reduce future buyers’ deductions, making it more expensive to own a home. Also, the proposed changes could further disincentivize current homeowners from selling, thus exacerbating the region’s inventory shortage.


To read the complete event recap, click here: