Why 2019 might be the first year since 2017 that buyers start to see more favorable prices
2018 was a hot year for the housing market. Characterized by bidding wars and on the spot home buying decisions, it was a whirlwind for sellers and buyers alike. Sellers especially enjoyed 2018, thanks to high demand from buyers, permitting them to stamp high price tags on their homes and reap the rewards inconsequentially. But, as we moved into the later months of 2018, the market began to slow as home prices soared a little too close to the sun, leading buyers to be more patient in hopes that prices would fall in 2019. December 2018 was still considered a good sellers’ market in comparison to past years, but it saw a major pump on the breaks when compared to 2018 as a whole. Now, as we move into 2019 and approach the spring months, here’s what you can expect if you’re looking to buy or sell a home.
A steady market for families looking to upgrade
A steady market is not a bad thing, and that is what we are experiencing in 2019. The most significant issues for buyers in 2018 were high mortgage rates and low numbers of homes for sale leading to bidding wars and price increases. This is expected to ease in 2019 as inventory numbers rise by 10 to 15 percent for houses priced at $250,000 or higher. Great news for couples and families looking for an upgraded home. For millennials who might not be able to afford homes in this price range, an increase in the supply of Town Homes is expected to continue during 2019, especially in high-cost areas with wage and job growth.
That being said, affordability will continue to be an obstacle for some, but not an insurmountable barrier. Home values are still expected to increase over the next several months, but not at the lightning pace they did in late 2017 to mid-2018. Prices are only likely to increase by 2 to 3 percent this year versus 5 percent last year and 5 percent in 2017. That being said, mortgage rates are expected to hit 5.5 percent by December of 2019. The side effects of increasing prices will see some buyers sitting out altogether during 2019 because they are priced out, and willing to be patient for a favorable buyer’s market. Buyers may also consider waiting due to high mortgage rates, deciding to sit more comfortably on their current, favorable mortgage rate.
Take your time, buying and selling a home is a big decision
In short, if you plan to sell during 2019, set your selling price realistically or try to incentivize buyers with other perks. If you are a buyer, take your time finding the right home at the right price for you. Buying a home for the first time or upgrading from your existing home is a big life decision and should be done with patience. Luckily, the 2019 housing market will be more balanced, allowing both sides to share a more equal playing field in the housing market game.