CURB APPEAL: REAL ESTATE TRENDS FOR 2018
By now everybody remembers that famous Oprah Winfrey episode of the 276 car giveaway and the cultural meme “You get a car! And you get a car!”
If only we could do that with homes! Not only would that take the financial burden off homeowners, it would take the guesswork out of our annual real estate predictions. Not having to look into a real estate crystal ball – now that would really be a smooth ride!
Unfortunately, that is not how things work, so we have done some research and have come up with some current real estates trends for 2018. The following are four trends to watch in the real estate world:
Boomerang Buyers: This is a former homeowner, typically in their early 40’s to mid 50’s in age, who has gone through a “short sale”…a “foreclosure”…or a “bankruptcy.”
The boomerang buyers has saved for a downpayment, waited out the seven year denial period required for bankruptcy filings, and is now ready to entire the housing market. Boomerang homeowners have not been successful in recent years because they have been waiting for the denial period to expire, have not had enough money for a down payment, poor credit and little housing inventory. The small inventory of existing houses leads us to our second forecast…
Supply equals Demand: For several years, there has been a small inventory of homes. Too many people waiting for the home’s value to rise and now the waiting seems to be over. In December, single-family home starts hit ten year high. As these new homes come onto the market, they will help stem the housing shortage. It will not be nearly enough to eliminate the shortage, but the trend is at least heading in the right direction. Realtor.com also predicts that the overall housing supply (existing and new construction) pinch will begin to ease late in the year.
“It looks like we could get to a point where we’re seeing growth in inventory sometime in the fall of 2018,” says Danielle Hale, chief economist for Realtor.com.
Millennials. Millennials have increasingly been part of the housing market but now they’ve really arrived. Consumer and student loan debt is still a big part of their lives, but there are some bright spots for this generation of Americans. Because millennials are at the point where they’re seeing their incomes grow, many of them are confident enough to take on bigger mortgages. Their current strong career development meshes with the overall strong economy.
The waiting is over. Because of stronger economic growth, inflationary pressure ( the situation where the general price level rises due to pressure from demand or supply side factors) and monetary policy normalization (raising the target range for the benchmark federal funds rate), mortgage rates are expected to reach 5%. This is extra motivation to purchase a home this year.
BerkshireHathaway Home Services has quality listings and knows great homes. We want you to know more than the average buyer. Call us at (803) 775-1201.