Home flips accounted for 5.5% of home sales nationally in 2015 — the highest number since 2007 — causing rumors of speculators’ return in anticipation of a housing bubble.
However, California’s stifled wage growth and high prices instead suggest a future decrease in home sales volume once the Federal Reserve (the Fed) further raises interest rates in late 2016.
Related articles:
Sales volume: A powerful magnet for home prices
Using the yield spread to forecast recessions and recoveries
To buy in 2016? Homebuyer sentiment wavers
Wage increases slow to a trickle; home prices rush on
The federal reserve is deliberately keeping interest rates low and is waiting until the November election to start increasing interest rates. The fear is that should interest rates increase now, the economy will be thrown into a recession, thereby assuring a change in political structure in the White House in November. The same logic for not stating the real inflation and unemployment rate.