Real Estate Trends for 2018 Going into 2019
Do you want to buy or sell a house this year? Are you aware of the latest real estate trends? Read on to find out what’s hot in the market right now.
Overall, the real estate market this year has been favorable for the sellers, and buyers have had to face a few challenges such as congested market and bidding. Millennial buyers continue to increase in numbers, and most of them are purchasing a house for the first time. The new tax codes will also impact the market.
Let’s take a detailed look at current real estate trends.
Housing inventory rises, but still isn’t meeting demand
This year began with a relatively low inventory level. However, once the fall season arrived, the inventory levels began to rise, followed by an increase in home prices. Expected values are around 3%, which is smaller than the figures we saw last year. Sales will also likely increase, but the percentages would still be on the lower side.
However, the supply of houses in the real estate market doesn’t match the current demand.
Millennials now form a greater percentage of buyers
Right from the start of this year, the real estate market has seen plenty of millennial buyers, and they’ll likely rise when the year comes to an end. Most of them earn higher numbers on average now, and hence, they are considering home ownership rather than renting.
According to research, millennial buyers will make around 43% of buyers who take on a mortgage this year. And an increased number of these buyers will also take middle and upper tier mortgages as well.
Tax reform can reduce the benefits of home ownership
The new tax bill has taken away some of the home ownership benefits which were previously enjoyed. This means that average sales can drop in the real estate market this year.
Before the new tax bill was announced, homeowners used local and state property tax deductions on their returns. But now these deductions will be limited to $10,000, meaning that taxes will rise significantly for a good number of buyers.
Mortgage interest deduction has also been revised to maximum $750,000. It would be some time before the affect of these changes is fully realized.
Home prices will continue to rise… but at a slower pace
2017 saw a drastic rise in home prices with average values touching 5.5%. However, this year, the average appreciation rates will only be around 3.2%. First time or entry level homes will enjoy the maximum increases in prices.
What does this mean for you?
2018 isn’t such a great year for you, mainly because of increase in prices, more millennial buyers and uncertainties revolving around tax changes.
You’ll face a lot less competition in the real estate market, fueled by low inventory levels and greater demand.