As we look ahead to coming trends in 2019 real estate, home buyers and sellers nationwide will face changes in the marketplace, according to the economic research team at realtor.com. From housing inventory to generational shifts, here are four top trends to look for in 2019.
1. Inventory will grow, especially for luxury homes
Inventory has been tight nationwide, hitting its lowest level in recorded history in the winter of 2017, says realtor.com. Supply finally began catching up with demand in 2018. That inventory growth will continue in 2019, but at rate of less than 7 percent. While sellers will have more competition, it will still be a good market.
“More inventory for sellers means it’s not going to be as easy as it has been in past years—it means they will have to think about the competition,” says Danielle Hale, realtor.com chief economist.
“It’s still going to be a very good market for sellers, but if they’ve had their expectations set by listening to stories of how quickly their neighbor’s home sold in 2017 or in 2018, they may have to adjust their expectations,” she adds.
In markets with strong economies and high-paying jobs, most of the expected inventory growth will come from listings of luxury homes.
2. Affording a home will be challenging
Interest rates and home prices are expected to continue to increase. Hale says homebuyers will continue to feel a “pinch” from affordability, as costs will still be a pain point. She predicts mortgage rates will reach around 5.5 percent by the end of 2019, which translates into the typical mortgage payment increasing by about 8 percent. Incomes are growing about 3 percent on average. These factors are hardest on first-time home buyers, who tend to borrow most heavily.
3. Millennials will dominate
Millennials are now the biggest generation of home buyers. Some are first-time home buyers, while others are moving up from starter homes. The millennial group accounts for 45 percent of mortgages compared with baby boomers and Gen Xers at 17 and 37 percent respectively, reports realtor.com. And many millennials still have student debt, which adds to the challenge of affording a home.
4. The new tax law’s effect is still unknown
For many tax filers, the effect of the new tax law won’t be known until their April tax filing results in a bigger tax bill or a bigger refund.
Renters are likely to have lower tax bills, but the new increased standard deduction reduces the appeal of the homeowner’s mortgage-interest deduction. The new tax law may dissuade people from taking out large mortgages which will affect higher cost homes. Add these factors to the challenge of affording a home and homeownership for some may be harder to achieve or less appealing.
The net effect of the coming 2019 trends is that even with these challenges, sellers are in a good position and homeowners will continue to enjoy positive financial gains from their home.
For more information, read the full report at https://www.realtor.com/news/trends/real-estate-trends-expect-2019/
Pricing and prepping your home to sell at the highest price requires strategy, even in a red hot market like Boulder County.
The best strategy is the one that suits your personal needs and local market conditions. For those reasons, your Realtor is the most reliable advisor for pricing your home. Your Realtor also can offer insights on improvements that will boost your home’s appeal and value.
If you’re just beginning to consider selling, take a look at these pricing and prepping strategies reported by Realty Times. Depending on your local market, your Realtor may recommend these approaches to selling your home.
Price Just Under a Price Break
For a home valued at $600,000, list at $599,000 to increase the number of searches your home appears in and the potential buyers that see your home. Even better, prices that aren’t typical, such as $597,400, increase the perception of value.
Price to Drive Demand
The same $600,000 home could be priced at $575,000, which is slightly undervalued. This might seem risky, since all offers could come in right at $575,000. As the seller, you can counteroffer or decline any offer you don’t want to accept. The advantage is that an under-value listing creates a sense of urgency, potentially motivating more buyers to make an offer. If enough people do this at once, this creates a buyer frenzy and increases the likelihood of multiple offers and escalated prices.
Review Comparable Listings
Review a comparative market analysis of recently sold homes and those currently active, expired and off-market. Remember, it’s important to look at what isn’t selling, as well as what is. Your Realtor will prepare this report for you and recommend how you should price your home relative to the comparable listings nearby. Generally, it’s recommended to price you home within 10 percent of the average home price in your area.
Make Select Home Improvements
When choosing which home improvements to make, go with those that will make a positive first impression and sell your home quickly for the lowest investment.
Two proven updates to make are:
Replace carpet that is more than five years old or looks worn or stained. Consider replacing the carpet with hard floors such as wood, bamboo or cork. Here’s an extra tip: Using the same material throughout each floor of your home makes it look bigger and creates the impression your home is worth more.
Apply a fresh coat of neutral paint to brighten your home and cover up scuff marks and dirt. Neutral grays and earth tones will appeal to a cross section of buyers. You can even freshen your kitchen with chalk paint, instead of going to the expense and inconvenience of fully remodeling. Chalk paint looks great and is hard to distinguish from the original finish.
Decisions on how to price and prepare your home for sale are important and influenced by local factors. So once you get past the considering stage, consult your Realtor for the best professional advice for your neighborhood.
‘Home for Sale’ signs are popping up like spring tulips in Boulder County, showing early indications the selling season is likely to emerge strong this year.
Those early positive signs are supported by February’s Boulder Area Realtor® Association sales stats that mark improvement in inventory and sales for single-family and attached dwellings.
“February showed good recovery in sales and inventory from last month’s slow start to the year,” says Ken Hotard, vice president of public affairs for the Boulder Area Realtor® Association. “It sets buyers and sellers up well going into the top home-selling months of March, April, May and June.”
Inventory increased for single-family and attached Boulder County dwellings in February compared to January. Single-family home inventory increased 7.6 percent – 592 units versus 550 – while townhome and condominium inventory improved 2.3 percent – 138 units versus 130 – month-over-month.
Month-over-month sales of single-family homes in the Boulder-area improved 9 percent compared to January – 240 units versus 220. Condominium and townhome sales rose 7.9 percent month-over-month – 95 units versus 88.
Year-to-date, single-family home sales in the Boulder-area increased 12.3 percent through February 2018, with 467 homes sold versus 416. The number of condominiums and townhomes sold also rose, marking a 26.2 percent year-to-date jump with 183 units sold versus 145 units for the same period in 2017.
Hotard says Boulder County’s real estate market hasn’t changed from last year, noting that “given the market we have, there is no denying demand is strong and there continue to be active buyers.”
The one shifting fundamental is increasing interest rates.
“Interest rates are over 4.5 percent now and projected to go higher. The question is just how high they will go,” explains Hotard.
He says it’s too soon to tell if rising interest rates will put a damper on home sales or the area’s ever-rising real estate prices.
All told, not much has changed in Hotard’s view. “We still live in a beautiful place that offers an exceptional quality of life, Colorado job growth continues to be strong, and the areas surrounding Boulder County are experiencing rising real estate prices.”
So bring on the 2018 home selling season, it’s budding with promise.
Ranked the No. 7 strongest housing market in the U.S., real estate sales in Colorado will remain robust in 2018, according to analysis by credit.com.
The predicted increase is around 3.1 percent. Colorado Springs is emerging as the top city for growth and median home prices are predicted to rise 5.7 percent through 2018.
Colorado’s home prices saw the sharpest increase in the U.S. over the past two years, reports credit.com. That’s quite a mark, given that 2016 existing home sales nationwide were the strongest they’ve been in a decade, following the worst housing crisis in U.S. history. In 2018, the nation’s housing market’s strength is expected to continue with U.S. home prices expected to rise 4.6 percent.
Here are 10 states that are predicted to be among the top performers in 2018:
Median home values in Las Vegas are expected to rise approximately 5.8 percent over the next 12 months. The median home price is approximately $285,045.
Lower taxes and a lower cost of living continue to lure profitable companies to relocate, expand or launch businesses inTexas. As a result, housing has boomed in Dallas and many other areas. In 2018, home sales are expected to gown 6 percent. The median home price in North Texas is $339,950.
Florida cities Deltona and Lakeland lead Florida’s strong housing market. With the appeal of ocean-side living, warm weather, and the ability to live an active lifestyle, Florida’s most popular areas are expected to see a more than 5% boost. The median home price in Deltona is $275,050.
Stockton – one of California’s fastest-growing cities – is predicted to grow its housing market by 4.6 percent. With a median home price of $385,050, Stockton is far more affordable than the state’s most desirable areas. For example, the median price of a home in San Francisco has increased $100,000 in the past year.
The Provo/Orem region was recently ranked as the best-performing city by the Miliken Institute, due to a robust high-tech sector and broad-based job and wage growth. Salt Lake City’s median home price averages $360,000, and housing sales are predicted to grow 3.2 percent in 2018.
- North Carolina
People are moving into North Carolina from other states, driving a strong housing market with home sales predicted to grow 6 percent in 2018. The median home price averages $325,000.
With the several year surge in housing prices, affordability is a growing issue in the Mile High City. Even so, the market is predicted to remain strong, leveling out a bit in 2018 to around 3.1 percent. Colorado Springs tops the cities for growth and the median home price there is slated to rise 5.7 percent this year.
Tennessee, Oklahoma and Georgia round out the list of the top 10 strongest housing markets in the U.S. for 2018, says Credit.Com. Nashville, Oklahoma City and Atlanta all bring the secret sauce that bolster home values. Median prices are $385,000; $99,000; and $218,350, respectively.
Read the full article at https://www.realtor.com/news/trends/10-states-predicted-strong-housing-markets-2018
The Boulder Valley real estate market has undergone a shift in 2017. While we began the year in a fairly strong seller’s market, it soon became apparent that the indicators we track were pointing to a shift toward a more balanced market.
Making predictions is always a risky business, but here are my top three predictions for 2018 and what they will likely mean for people in the market.
1. Appreciation will continue (but at a slower pace).
While the Boulder area continues to top the country in total appreciation since 1991 (a whopping 371 percent), we have fallen out of the top 10 — to number 19 — nationally in terms of one-year appreciation (10.84 percent according to FHFA). Nevertheless, many structural factors point to increased upward pressure on home values (including low unemployment, strong net migration, and lack of lots to build upon).
For single family homes, Boulder County experienced 5 percent appreciation through the first three quarters of 2017. While this is solid, it pales when compared to the over 15 percent appreciation during the same period of 2016.
In 2018, I predict we will see about 5 percent overall appreciation in Boulder County, with individual cities varying substantially. I predict that the highest appreciation rates will be in Longmont and Erie, and the slowest appreciation will be in the City of Boulder.
For attached homes (townhouses and condos), Boulder County experienced a meager 1.7 percent improvement through the third quarter of 2017. This number is somewhat misleading, as most areas were up by a higher percentage while the City of Boulder was actually down 3.7 percent.
For 2018, I predict that attached homes will appreciate by about 5 percent, with appreciation being higher in every locale except the City of Boulder. In Boulder, it is possible that we will see a continued decline in prices, especially if investment property owners who have not brought their units up to Smartregs compliance decide to sell rather than spend the money to them into compliance.
What this means: For buyers, now is a great time to buy, especially if you are in the market for a condo in the City of Boulder. Waiting will cost you, but not as much as in previous years. For homeowners, if you are considering selling, you have ridden a strong wave of appreciation over the last several years, and you will not likely see the same rate of appreciation by continuing to hold.
2. Inventory will increase in 2018.
Since 2011, the inventory of available homes on the market has generally gone down when compared to the preceding year. That trend finally broke in 2017, with available inventory of both single family and attached homes rising above 2016 numbers. Without getting too deeply into the weeds, a number of indicators that we use to track the market point to a continuation of this trend in 2018. Some of the more telling indicators are (1) a falling sales price to list price ratio, (2) an increase in months of inventory, and (3) more expired listings (homes that did not sell on the market).
In the City of Boulder, on the single family side, I predict that inventory will see the biggest increase in the $1 million+ market as a gap has started to open between sellers’ opinions of their homes’ values and what buyers are willing to pay for them. On the attached side, we will likely see an increase as well, partly due to an influx of non-Smartreg-compliant units as well as condos at the Peloton being converted from apartments.
What this means: For buyers, you will finally have more homes to choose from in your search. For sellers, you will have to be much more careful when pricing your home to avoid being rejected by the market.
3. Interest rates will rise modestly.
For the past several years, numerous experts have predicted mortgage interest rate increases. And for as many years, the rate increases have been non-existent or far more modest than predicted, even after the Fed increased its Fed Funds Rate. Speaking of which, the Fed is expected to raise rates again this month as the economy shows continued signs of recovery. However, the number and size of interest rate increases in 2018 is far from certain because of a change in leadership of the Fed.
Lawrence Yun, the chief economist for the National Association of Realtors, predicts that rates will increase to 4.5 percent by the end of 2018, which is about 0.5 percent higher than current rates. This figure could be affected by tax reform, the country’s economic performance, and other political factors. Nevertheless, for planning purposes, an increase to 4.5 percent in 2018 is likely to be in the ballpark.
What this means: While appreciation rates and inventory are starting to move into buyers’ favor, there will be a cost to waiting to enter the market in terms of affordability. That is, the longer you wait, the more you will likely pay for a home and the more interest you will likely pay for it.
Conclusion: Sellers have been the primary beneficiaries of the real estate market since the recovery of the Great Recession, but 2018 will finally see buyers in a stronger position.
If you’re planning to sell your home this year, timing can make a big difference in your home’s final selling price.
Even though statistics show Boulder County’s real estate market remains among the hottest in the country, Realtor.com reports that your “window of opportunity may be rapidly narrowing.”
“We’ve seen two or three years of what could be considered unsustainable levels of price appreciation,” says Javier Vivas, director of economic research for realtor.com®.
The key word there is “unsustainable.” Changes on the near horizon suggest you should get going and be among the first to sell your home in 2018. Here are the top five reasons:
1. Interest rates remain historically low
While interest rates have already increased from the recent lows, today’s 30-year mortgage rates at just above 4 percent still draw buyers into the market.
But experts predict rates will rise to a less enticing five percent before the end of the year. With rate hikes expected to continue, you should list your home earlier in the year. You will not only sell your home more quickly, if you’re buying another home, you’ll benefit from the lower rates.
2. Inventory is tight and demand high
In the red-hot housing market of Boulder County, buyers far outnumber available homes for sale. Tight inventory is a trend that extends across the nation. And the housing shortage will likely get worse before it gets better: Realtor.com predicts inventory will see a decline of 4 percent year-over-year by March.
Inventory shortages result in quick sales, bidding wars, and pro-seller terms. This can be especially true in areas like Boulder County, where a prolonged shortage has persisted for years.
Cash buyers are also a factor, making up 22 percent of all home sales nationwide in November 2017, according to the National Association of Realtors®.
3. Home prices are still increasing
While home price increases in the Boulder area have moderated recently, prices are still rising. But with interest rates increasing, slowing price appreciation is expected to continue. By listing your home sooner rather than later, you’ll avoid the cooling trend.
4. Buyers are better off financially
“Incomes are growing and people are finding better and more stable jobs,” Vivas says. High consumer confidence, low unemployment, and stock market surges make buyers feel good about their financial outlook.
In fact, the Fed projects an unemployment rate of below 4 percent for the first time since the 1960s, reports Realtor.com.
All of this fuels home sales, which grew 5.6 percent nationally in November 2017, reaching its strongest pace in nearly 11 years.
5. Millennials want to buy
More and more millennials are entering their 30s, a time in which taking the homeownership plunge becomes increasingly desirable. Realtor.com data suggest that this demographic group could account for 43 percent of home buyers taking out a mortgage in 2018, equating a 3 percent year-over-year increase.
In a complex real estate market, local real estate knowledge helps you time the sale of your home to your best advantage. So, if you’re considering selling, consult with a Realtor soon.
You can read more at https://www.realtor.com/advice/sell/reasons-to-sell-your-home-in-2018/