The first two quarters of 2018 were a great seller’s market. Interest rates were relatively low, and home prices were high. Many people in the industry were thinking the good times were going to continue to roll into the second half of the year. However, that wasn’t the case. I think pretty much all agents, buyers, and sellers can agree the market really started to cool off in the second half of the year.
Now, the question on everyone’s mind is what will happen in 2019. Below are our predictions and recommendations for the coming year.
Those Pesky Interest Rates Will Likely Continue to Rise
Many economic and real estate experts predict mortgage interest rates will continue to rise in 2019. Interest rates are governed by many market forces, including the rules of supply and demand. When there is an increase in people looking to take out a loan due to a bullish stock market and low employment, then the rates tend to go up. Conversely, when fewer people are trying to borrow money when unemployment is high or stocks and foreign markets are low, the rate tends to go down.
Seeing how the US economy has been generally strong recently, there are a lot of households looking to invest in real estate.
If you’re thinking about making a real estate purchase, sooner is better than later. You can currently get a 30 year fixed loan for around 4.5% APR. Many experts forecast that number will be pushing 6% by the end of 2019. Pulling the trigger, and securing a loan at the current rate will save you tens of thousands of dollars in the long run.
Finally, More Homes to Choose From
One of the big points of complaint in 2018 was the lack of property options. The number of houses for sale was at an all-time low. The lack of houses for sale triggered bidding wars across the country, pushing sales prices through the roof.
The lack of supply is predicted to ease up in 2019. Experts forecast there will be an additional 10 to 15% of new houses for sale. This is advantageous for households looking to make a purchase. The increase in property will give additional options for buyers, and drive prices down.
Real estate markets are obviously different from city to city. If you are a buyer, and there are a lot of good properties in your area, we recommend pulling the trigger. However, if your local market still has high prices and low selection, we recommend waiting a few months. Just keep your eye on interest rates. It’s always better to spend a little extra on the property, and still get your loan at the better rate.
Huge Gap in Market Strength from City to City
The real estate market has always had a wide range in overall strength from city to city. Experts predict this gap will spread in 2019.
After looking at many different reports, we put together our predictions for the hottest and coolest markets. The reports consulted used the median home price from the start to end of 2018, population change, and the number of foreclosures as the main criteria for the predictions. Below are our pics for the fastest growing and shrinking markets for 2019 based on the third-party data.
El Paso, TX
Las Vegas, NV
Jan Jose, CA
If you live in a city on the rise, be happy you invested in real estate.
If you live in a city stuck in a slump, be patient. Don’t sell your house at a huge discount, and lose all the equity you’ve acquired over the years. We highly recommend waiting for better times till you make your move.
2019 could be a difficult year for people in the real estate industry. However, if you do decide to buy/sell, we highly recommend working with the right people. No matter if you’re looking for a Las Vegas or Utah County real estate agent, you’re going to want to get the best service at the lowest price. If you’d like to schedule a free consultation where we can discuss your real estate goals, please contact us today.