The housing outlook continues to look bright for Silicon Valley in 2017, even if the region is challenged by a tight housing supply and low affordability, according to Bay Area real estate analyst Carole Rodoni.
At a district realtor meeting in Los Altos last month, Rodoni told members of the Silicon Valley Association of Realtors that she expects the economy to continue to grow this year.
Rodoni, president of Bamboo Consulting Inc. and former president of Fox and Carskadon Real Estate and Alain Pinel Realtors, said rising interest rates are a long time coming and signal growth. After years of historically low interest rates, the U.S. Federal Reserve increased interest rates in December for the second time in 10 years. With wages rising and the economy growing, Rodoni anticipates more rate hikes as a way to curb inflation.
The Dow Jones industrial average closed above 19,000 points for the first time and the 10-year Treasury yield hit its highest level for the year in November – signs that investors are optimistic. Rodoni said the Republican-led administration aims to increase jobs and lower corporate taxes, which would bring an infusion of cash and business into the U.S. economy. Right now, the corporate tax rate is 35 percent.
Along with the Affordable Care Act, Rodoni expects that Republicans will tweak the Dodd-Frank Act, ease government regulations and spend massively on infrastructure.
Silicon Valley still booming
The local picture looks especially bright to Rodoni. She said Silicon Valley’s housing market is booming because tech companies are producing and have invested in staying in the region. In fact, the region’s growth has surpassed that of the country. While the U.S. market grew 3.2 percent in the third quarter, the Bay Area grew 4.1 percent and Santa Clara County grew 8.9 percent.
Rodoni balks when people say they can’t live in the Bay Area because it is “unaffordable.” She insists that there are still affordable places, many accessible by BART or Caltrain.
“Where you want to live is where your income allows you to live,” she said.
Rodoni remains a firm believer in real estate.
“It is still the best thing to invest in real estate,” she said. “Whether you are a buyer or seller depends on where you need to be. It’s still the best investment of your lifetime.”