We are quickly moving toward the start of a new year, which makes it a great time to pause and consider current and future housing market fundamentals that could guide your decisions regarding buying and selling real estate over the next year. Below I’ve outlined key points from the Realtor.com® 2019 National Housing Forecast to consider as you work to set your real estate goals for the coming year.
Inventory is expected to increase in the coming year, however the realtor.com® report notes that “unless there is a major shift in the economic trajectory,” they “don’t expect a buyer’s market on the horizon within the next five years.”
The Bottom Line: For Buyers
Homebuyers in 2019 will meet pricier conditions than those in recent years, both due to home value appreciation and expected mortgage rate increases. Buyers that do remain in the market will benefit from less competition, however may feel some pressure to buy before things become even more expensive. It will also be critical for buyers to prioritize their wants and needs, a shift from the frenetic bidding wars and stiff competition that marked 2018.
The Bottom Line: For Sellers
Though 2019 will likely remain a seller’s market, it will be important for those listing their homes to consider that there will be less competition among buyers and strategic pricing will be key. Days on market are expected to increase slightly, as buyers take their time to select among the homes available for sale. At the end of the day, “sellers who price competitively can still walk away with a handsome amount of profit,” they just won’t see the run-up in prices found in past years.
Inventory gains are expected to remain moderate in 2019, with growth projected around 7 percent. Luxury inventory is set to flip this trend, however, with double-digit gains expected in the high-end sector and in cities such as the Seattle-Bellevue-Tacoma region. The number of homes sold will continue to soften as it has over the past few months in the Emerald City, with a year-over-year decline of around 2 percent projected for 2019. Millennials will make up the largest portion of mortgage borrowers, at 45 percent, and will continue to make up the biggest portion of home buyers for the next decade or so. Finally, the implications of the new tax plan remain to be seen, as April 2019 will mark the first time that taxpayers will file under President Trump’s new plan. It is expected to lower the tax bill of renters, but could end up causing some homeowners to fork over more to Uncle Sam.
For more on next year’s real estate trends, read the full report here.