What Can You Expect in Real Estate This Year? Here Are Our Predictions.
When it comes to real estate, what trends can you expect to see in 2019? And what impact will millennials have on the real estate market? By examining patterns that emerged in 2018 and looking at market reports, let’s talk about what you can anticipate this year.
2018: A Real Estate Recap
If you ask around, you’re almost certain to hear the same thing over and over—that the 2018 housing market saw its fair share of ups and downs. For instance, 2018 started with an interesting combination of extremely high home prices and historically low mortgage rates. This was a market where sellers definitely had the upper hand. However, later in the year, the increase in home prices began to falter, and interest rates rose to their highest points in close to 8 years. With this, the upper hand began to shift from the seller to the buyer.
But will these trends continue on into 2019? Can we expect the same shifts to occur throughout the year? Here’s what we’re expecting to see in the coming months.
Mortgage Rates Will Continue to Climb
In spite of climbing steadily throughout the past two years, mortgage rates are still lower today than they were through most of the recession. They are especially low given the type of economic growth we’ve been experiencing as of late. However, we expect to see this change in the coming year, with experts predicting the 30-year fixed rate mortgage to reach 5.8 percent—a number not really seen since 2008 when rates were on the way down.
Despite those rising mortgage interest rates, there is one generation that is predicted to continue buying homes at a record pace—millennials. In fact, millennials will likely be the largest segment of home buyers in 2019, accounting for nearly 50% of mortgages compared to 37% for Gen Xers and less than 20% for Baby Boomers.
But what other trends can we expect to see among millennials in 2019? Let’s take a closer look.
Millennial Home Buyers Are Heavily Researched and Well Prepared
Thanks to media giants like television and social media, as well as a wealth of online research, millennial buyers are hitting the market informed and prepared to buy. Unlike previous generations that relied on real estate professionals to introduce them to homes that met their search criteria, millennials are finding homes online. However, they will still turn to the pros in 2019 for help with information that isn’t as easily researched—which neighborhoods are up and coming, which homes are primed to gain the most value in the coming years, and more. Real estate professionals also lend a great deal of assistance when it comes to other aspects of home buying, including negotiations, navigating through inspections, and more.
Millennial Home Buyers Are Serious Competition for Other Buyers
Not only are more millennials buying homes, but they also have greater purchasing power than ever before thanks to advances and growth in their careers. The 2018 National Association of REALTORS® Home Buyer and Seller Generational Trends Report reported that nearly a third of Millennials purchased homes for $300,000+ in the past year, up from 14 percent just five years earlier. This segment will only continue to get larger in 2019.
But what does this mean? Simply put, it means that millennials are coming into their own and becoming serious players when it comes to competing for a home. In other words, millennials and older generations are now going head-to-head for the same properties. While both generations are often looking for similar amenities, including a walkable neighborhood and luxurious upgrades to the house, they also have completely different points of view in other ways. We predict this will make marketing homes a unique challenge for both agents and sellers, who will be trying to cater to two completely different generations with the same property.
For more information on what 2019 has in store for real estate, feel free to reach out. I’d love to help you find your next home.
