What’s Ahead for Real Estate in 2019?
Everyone wants to know:“Whereis the housing market headed in 2019?”
It’s not only buyers, sellers, and homeowners who are impacted. The real estate market plays an integral role in the overallU.S.economy. Fortunately, key indicators point towards a stable housing market in 2019 with signs of modest growth. However, shifting conditions could impact you if you plan to buy, sell, or refinance this year.
WILL HOME VALUES........?
While the rapid price appreciation we witnessed earlier in the decade has slowed, the combination of a strong economy, low unemployment, and a lack of inventory in some markets/segments continue to push prices a bit higher (mostly in the segment below $300,000) BUT other recent booming markets/higher price segments such as South Florida are experiencing consistent price declines.
What does it mean for you? If you’re in the market to sell a home, act fast. Prices will continue to go down, so you’ll collect less the longer you wait. If you’re a current homeowner, real estate has proven once again to be a solid investment over the long term. In fact, the equity level of American homeowners reached an all-time high in 2018.
SALES LEVELS WILL STABILIZE
In 2018, we saw a decline in sales, primarily driven by rising mortgage rates and a lack of affordable inventory.
The medium and long-term prospects for housing are good because demographics are going to continue to support demand. With a correction in prices,incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.
What does it mean for you? If you’ve been scared off by reports of a market slowdown, it’s important to keep things in perspective. A cool down can prevent a hot market from becoming overheated. A gradual and sustainable pace of growth is preferable for long-term economic stability.
MORTGAGE RATES WILL RISE
Federal Reserve would continue to raise interest rates this year, resulting in a rise in mortgage rates. While no one can predict future mortgage rates with certainty, rates for a 30-year mortgage will likely surpass 5 percent in 2019, up from around 4.62 percent at the end of 2018.
While mortgage rates above 5 percent may seem high to today’s buyers, it’s not out of line with historical standards. So for buyers who can make the math work, buying a home is likely still an investment worth making.
What does it mean for you? If you’re in the market to buy a house or refinance an existing mortgage, you may want to act quickly before mortgage rates rise. To qualify for the lowest rate available, take steps to improve your credit score, pay down existing debt, and save up for a larger down payment.
AFFORDABILITY ISSUES WILL PERSIST
Although the desire to own a home remains strong, the combination of high home prices and rising mortgage rates will make it increasingly difficult for many first-time buyers to afford one.
Buyers who are able to stay int he market will find less competition as more buyers are priced out but feel an increased sense of urgency to close before it gets even more difficult.
Although the number of homes for sale is increasing,which is an improvement for buyers, the majority of new inventory is focused on the mid-to-higher-end price tier, not entry-level.
What does it mean for you? Unfortunately, market factors make it difficult for many first-time buyers to afford a home. However, as move-up buyers take advantage of new high-end inventory, we could see an increase in starter homes hitting the market.
MILLENNIALS WILL MAKE UP LARGEST SEGMENT OF BUYERS
The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential home buy from the market.
Millennials are also likely to make up for the largest share of home buyers for the next decade
What does it mean for you? If you’re in the market for as tarter home, prepare to compete for the best listings. And if you plan to sella home in 2019, be sure to work with an agent who knows how to reach millennial buyers by utilizing the latest online marketing techniques.
WE’RE HERE TO GUIDE YOU
While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home values in your particular neighborhood.
If you’re considering buying or selling a home in 2019,contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.
START PREPARING TODAY
1. Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
2. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.
3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!
If you plan to SELL this year:
1. Call us for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area.
2. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.
3. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage ... and get you one step closer to moving when the time comes!