July 27th, 2018
Whether you are a homeowner looking to get the maximum return on investment, a buyer interested in fair market value or an industry insider grappling with the moving parts of the real estate industry, these are some trends and predictions you should know about.
Lower Home Supply Causing Significant Value Growth
Indicators point to a U.S. economy that has settled into a nice growth period. Unemployment rates have touched some record lows, wages appear to be on the rise and Millennials are entering high earning and home-buying years. Couple these factors with the fact that last year’s tax reform laws will likely put more money back in everyday Americans’ pockets and homes could be a hot commodity, so to speak.
Home supply — on the other hand — does not appear ready to meet the rising demand of buyers. Experts are predicting that rising demand will collide with the housing shortfall and prices will ramp up in 2019.
Home Values Could Rise Another 5 Percent By Year’s End
Some real estate insiders are pointing to National Association of REALTORS information that the number of available homes for sale has dropped for 35 consecutive months. The volume of sales is down because there simply are not enough homes being put on the market. Coupled with the uptick in the economy, sellers are in the driver’s seat right now and they are demanding top dollar for their homes.
That being said, it may be in the best interest of first-time homebuyers to get into the market sooner rather than later. The improved wages from the surging economy may not be able to keep pace with a potential 5-percent increase in property values by the end of 2019. It looks like a buy now or pay later real estate market.
It’s Not A Housing Bubble And Won’t Burst
The housing market has been on a tear over the last three years. Property values have appreciated fairly consistently for 35 straight months. Such data mirrors that of the housing market right before the crash. While some experts are calling for another housing bubble to burst due to an unforeseen flaw in the system, tough legislation and oversight are in place. It’s only human nature to be cautious when conditions appear similar to those leading up to a bad outcome.
This time around, rising home prices appear to be based on solid economic factors. Either contractors are going to start massive home-construction builds all over the country or the shortage will continue to drive prices up. While experts say we are not in a so-called housing bubble, the market may level off down the road to get in tune with consumer affordability.
If you are in the market for a new home, be sure to contact your trusted mortgage professional to get your financing pre-approval!