What will 2019 bring for our housing market? Will we continue to see price gains? Will higher interest rates cool the market?
As we have now started 2019, our spring market is moving faster from the start than it has in other recent years. Buyers are already out, but what will we be in store for? Here are my 2019 predictions!
1)The interest rates will rise roughly a quarter to a half point – but I don’t foresee rates getting much (if at all) above 5% as some have said. With increasing inventory levels, fewer homes sales and housing affordability an issue, lenders and banks will be quite cautious to push things too far, which could cause a stall in the market. This will be especially true in the summer months after the tax reform is truly felt.
2)Sellers will need to do more to sell their homes. As we saw in 2018, as the market started to level off, it wasn’t as easy to sell a home as it had been in 2016 and 2017. Sellers have to get a little scrappy and really fine tune their homes, remembering that buyers want truly move-in ready. We live in an on-demand economy where we can do virtually everything from our phones. But while we can order dinner, buy groceries, plan/book a trip via our phones…we can’t remodel a kitchen using them. Doing so takes time, money and know-how – 3 things buyers don’t often possess or don’t want to deal with. Sellers have to do more and work harder to sell. Those that do will sell quickly, but those that don’t will find their homes sitting or selling at discount. What’s more, this will increase our market times.
3)Rents leveling off or decreasing. We have already seen this to start 2019. Renters are quite picky and smart landlords will try to keep their current tenants, even if that means lowering their rent, or offering them incentives to stay.
4)Affordability – a topic we will continue to hear more about. The affordability of housing in America is still a challenge, and it will continue to be a topic of conversation throughout 2019. Remember that a 1% increase in interest rates means a 9% decrease in buying power.
5)Fewer homes will sell.
6)Tax Reform – this is the big “what if” of the year. What impact will the tax reform plan have? Will people have less money to spend? More money to spend? And regardless, will it change spending on housing?
So there you have it – my 2019 predictions. Let’s see if I’m right! I’ve posted a few related articles below, showing a variety of expert sources & what they see
Related Articles:
Inman: Top 10 Housing Markets to Watch
Redfin’s 2019 Housing Predictions
YourExecutiveNeighbor 