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4 Housing Market Trends To Expect In 2019

October 26, 2018 by James Scott

4 Housing Market Trends To Expect In 2019Just like Fantasy Football players try to predict who will score the most touchdowns, pass for the most yardage and win the Super Bowl, people with an eye on the real estate market also engage in speculation. Like sports fans, expectations are often driven by statistics from the previous season.

That being said, these are some of the important housing market trends buyers and sellers can expect in 2019.

1: New Construction To The Rescue (Sort Of)

The 2018 housing shortage has been well documented. The inventory shortfall has driven up listing prices and created a powerful seller’s market. The law of supply and demand would indicate that the construction sector will ramp up new home building in 2019.

Materials and labor costs are relatively modest when compared to new homes selling for approximately $150 per square foot on average. Home prices are expected to rise throughout 2019 creating more opportunity for construction outfits to build custom and spec houses. It is unlikely that new construction will keep pace with the high demand for homes. But buyers can expect more availability and custom-design options by working directly with builders.

2: Millennials Will Drive The Housing Market (Again)

In 2018, the full presence of Millennials was felt in the housing industry. There are now an estimated 75 million adults who fall into the demographic and they were reportedly responsible for upwards of 34 percent of all recent single-family home sales. Millennial home buyers were significantly responsible for higher than usual competition for starter homes in 2018.

At the older end of the spectrum, many are now in their mid-30s and fully engaged in careers. At the younger end, many are graduating from college and looking for starter homes as they enter the workforce. With more looking to buy first homes and others trading up, sellers would be wise to remain keenly aware of what Millennials want. Having grown up immersed in technology, Smart homes, and other integrated technologies tend to be attractive to this class of buyer.

3: Waiting May Result In Higher (But Still Low) Rates

The Federal Reserve continues to roll out interest rate increases against the fast-growing economy and employment stability. This did not come about unexpectedly and should not frighten off home buyers.

The Fed dropped rates to historic lows in 2008 after the Great Recession hit in an effort to stimulate growth. These days, business is thriving and there are reportedly 7 million unfilled jobs. All this good news means that the Fed will likely continue its planned increase throughout 2019. However, rates are likely to remain relatively low and buyer friendly.

4: Economy Expected To Remain Robust

To say we live in unusual times would be something of an understatement. The country has been embroiled in a series of tariff wars and trade negotiations many thought would cripple the GDP. The exact opposite seems to have occurred.

With the NAFTA deal now being redone as the USMCA, trade with Canada and Mexico are expected to be more beneficial for American businesses and wages. The administration is currently reworking a trade deal with the EU and a zero-tariff goal is on the table. The U.K. is in the midst of Brexit and a more beneficial trade agreement is expected there as well.

In terms of the dust-up with China, manufacturers appear to have simply shifted their output to other plants to avoid paying hefty tariffs. The price of goods appears to be staying low and the U.S. Business Confidence Index remains over 100 percent. These trends seem to overwhelmingly favor the American economy and housing market in 2019 and beyond.

Whether you are buying or selling, your trusted real estate professional is aware of the trends in your area and ready to help you find success with your real estate transactions.

Filed Under: Real Estate Tagged With: Market Conditions, Market Trends, Real Estate

NAHB: Builder Confidence in Housing Market Ticks Up in October

October 23, 2018 by James Scott

NAHB Builder Confidence in Housing Market Ticks Up in OctoberHome builder confidence in national housing market conditions rose one index point for a reading of 68 in October. Readings over 50 indicate that most builders are confident about market conditions. Rolling three-month averages showed mixed results. The Northeastern region gained three points for an index reading of 57; the Midwestern region lost two index points with a reading of 57 and the Southern region posted a gain of one point with a reading of 70. The Western region held steady at 74.

Readings for sub-categories of the Housing Market index showed a one-point gain to 74 for current market conditions, Builder confidence in market conditions over the next six months also gained one point for a reading of 75 index points. Builder confidence in buyer traffic rose four points to 53. This was remarkable as historical readings for buyer traffic rarely rose above the benchmark reading of 50.

Demand for Homes Rises

The National Association of Home Builders reported that demand for homes increased regardless of high home prices, rising mortgage rates and low inventories of available homes. Labor shortages and high cost of buildable lots continued to weigh on builder confidence. Analyst predictions that home prices have peaked did not impact October’s builder confidence readings.

Home Builders Look Toward Affordable Housing

When the current housing boom started, builders concentrated on building high-end homes as cash buyers and investors fueled demand. Home prices rose quickly as inventories of homes for sale dwindled; first-time and moderate-income home buyers were sidelined as affordable homes were quickly snapped up. Strict mortgage qualification requirements presented challenges to buyers with credit problems. Consumers struggle with home price growth that exceeds inflation and wage increases.

As analysts report that home prices may have hit their peak the highest reading for builder confidence in recent months was 74 in December 2017. Slowing increases in home prices have signaled builders that favorable housing market conditions may have reached a tipping point. If another recession occurs, those who bought their homes at the top of the market and who have little equity are most at risk. Analysts cited high priced coastal areas as ripe for this risk. Meanwhile, builders are looking to create more affordable housing in response to signals of slowing growth in residential real estate markets.

Contact your trusted real estate professional to find out about about the market trends specific to your area.

Filed Under: Real Estate Tagged With: Builder Confidence, Market Conditions, Market Trends

Foreclosure Rates Expected To Dip Below 12-Year Low

October 19, 2018 by James Scott

Foreclosure Rates Expected To Dip Below 12-Year LowThe record-setting pace of the U.S. economy continues to positively impact the housing market and home foreclosures now stand at an astonishing 12-year low.

Coming off a GDP growth rate of 4.1 percent and a historic bull stock market run, everyday Americans appear to be benefiting from one of, if not the strongest economies in decades. According to data compiled by CoreLogic, mortgage delinquency rates continue to improve and are already at the lowest levels in 12 years.

Building on last year’s national trend, foreclosures and mortgages more than 30 days past due declined to 4.2 percent in May. Other analytics show that mortgages at some stage in the foreclosure process also dipped by.02 percent from May 2017 to 2018. With a low 5-percent national foreclosure rate, the industry enjoys its best forecast since September 2006.

Some Housing Markets Lag Behind

While the country appears to be immersed in an economic revival, areas impacted by severe weather and hurricanes have not quite shaken off their impact.

“Serious delinquency rates continue to remain lower than a year earlier except in Florida and Texas, the hardest-hit states during last year’s hurricane season, CoreLogic president and CEO Frank Martell reportedly said.

There are also regions unaffected by hurricanes that are also lagging behind the strengthening conditions, according to research by ATTOM Data Solutions.

  • Foreclosures increased in eight states and the District of Columbia through the first half of 2018.
  • The District of Columbia suffered the worst foreclosure rate in the nation with a 60-percent increase over 2017.
  • Foreclosures increased in only 28 of 217 metropolitan housing markets studied. Oklahoma City topped the list with a 22-percent uptick.
  • Through June 2018, New Jersey endured the highest state foreclosure rate, with.99 percent of all properties in foreclosure.

According to ATTOM, Atlantic City, Trenton, Philadelphia and Chicago topped the list of total foreclosures during the first half of 2018.

2019 Foreclosure Predictions

History makes an excellent teacher and the wildfires destroying California communities are expected to negatively impact home ownership.

“While the strong economy has nudged serious delinquency rates to their lowest level in 12 years, areas hit by natural disasters have had increases,” CoreLogic chief economist Frank Nothaft reportedly said. “The tragic wildfires in the West will likely lead to a spike in delinquencies in hard-hit neighborhoods.”

“As an example, the wildfire in Santa Rosa last year destroyed or severely damaged more than 5,000 homes,” Nothaft reportedly said. “Delinquency rates rose in the aftermath, and in the ensuing months we observed home-price growth accelerate and sales decline. We will likely see the same scenario unfold in fire-ravaged communities this year.”

While America’s collective hearts go out to the families displaced by the California wildfires, the positive economic trends are expected to continue in much of the country.

CoreLogic’s Nothaft predicts foreclosure and delinquency rates to decline even further. Heading into 2019, positive numbers could upstage the current 12-year low and reach levels not seen in upwards of 15 years.

Contact your trusted real estate professional to learn about the market trends in your area.

Filed Under: Real Estate Tagged With: Foreclosure Rates, Market Conditions, Market Trends

3 Generations Top Housing Market Trends

July 13, 2018 by James Scott

3 Generations Top Housing Market TrendsHistorians like to say that those who do not learn the lessons of the past are doomed to repeat them. In the real estate industry, the chances of that happening are slim because agents and other professionals follow market trends closely.

That being said, a careful examination of 2017 market trends and other factors can help highlight where the housing market is headed. Consider these top trends when deciding about whether to buy or sell a property.

Millennials Scooping Up Homes

According to resources such as Zillow, the low inventory and emergence of Millennials in the home-buying market helped break records last year. Millennials comprised upwards of 34 percent of the market and about two-thirds of them were reportedly first-time home buyers.

Given the shortage of entry-level homes for this demographic, 2018 and 2019 should have them in the driver’s seat in terms of buying trends. Although home prices are expected to rise in the single digits during the foreseeable future, the second wave of Millennial home buyers are likely to take a big bite of listed properties. As this group moves into their mid-30s, expectations are that last year’s 34 percent turns into about 43 percent of homes purchased. Millennials appear to be setting the pace.

Gen Z Home Buyers Expect Smarter Homes

Consider those born between 1995 and 2001 are adults or on the cusp of becoming adults. The front end of Generation Z is graduating college and looking for starter homes. This group is bound and determined to be different and they were basically weaned on technology.

Tech-friendly kitchens, lights and home-integrated devices have been trending and this demographic is likely to make them a priority when buying a home. Homeowners who are considering updating to a so-called “Smart Home” could be rewarded with resale value once Gen Z enters their collective mid-30s. Smart homes are trending and could go vertical with Gen Z buyers.

Generation X Returns From Great Recession

The housing crisis of 2007-09 put upwards of 10 million Americans out of their homes. Forced into foreclosure and bankruptcy, the financial aftermath of that catastrophe is coming to an end.

Those that filed for bankruptcy during the crash are in position to put their rebuilt credit to work. According to reports, approximately 1.5 million people could become eligible to re-enter the housing market in 2019.

A large portion of these potential returning homebuyers fall into the Gen X age group. They are likely to be savvier than the first time out. Many of these 50-somethings are expected to be frugal and cautious value buyers that could target properties that are traditionally considered starter homes. Regardless of how the trend plays out, Gen X is coming to a housing market near you.

If these emerging trends indicate anything, it’s that the shortage of homes on the market will only get tighter. Several large emerging demographics and returning buyers are going to speed an already fast-selling market. The trending idea may be to buy a home in today’s market and save money.

Your trusted real estate agent is sure to keep up to date on all the trends. Be sure to contact them as soon as you are ready to list your current home or find the new home of your dreams.

Filed Under: Real Estate Tagged With: Home Sales, Market Trends, Real Estate

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