They say the only constant is change, and that’s especially true in real estate. Right now, we’re seeing an expected slowdown as the overheated market corrects itself. But what does the future hold for buyers, sellers, and agents in 2019? Here’s our best guest at the biggest 2019 real estate trends.
Millennials Will Corner the Market
As more Millennials move into their 30s, they’re claiming a larger piece of the real estate pie. Millennials now account for almost half of all mortgages—something that might come as a surprise, considering the generation’s high debt ratio.
Expect Millennials to be incredibly savvy buyers who will hunt online for the best bargains. They’re less interested in luxuries like quartz countertops and Jacuzzis. Instead, Millennials are looking for fixer-uppers that can be updated with eco-friendly features.
Buyers Will Have More to Choose From
Inventory has been tight over the past few years—not because there weren’t any homes on the market, but because the demand has been so high. This time last year, we saw the lowest level of housing inventory ever. Next year, we should see more homes hit the market with an inventory growth of about 7%.
Luxury homes in hot markets such as Seattle, Boston, San Jose, and even Nashville will likely see much greater gains than the rest of the country. Expect to see a bump of 10% or greater for top-end properties in those markets.
Bottom Line: More inventory is good news for buyers. Sellers, however, may be disappointed in the increased competition.
Home Prices and Mortgage Rates Will Rise
Unfortunately, it’s not going to get any easier to afford a home next year. While the rate of rising home prices should continue to slow, we also expect mortgage rates to go up by about half a percent. Housing costs are still climbing faster than average incomes, and we don’t expect that to change in 2019.
First-time homebuyers will be hardest hit by the cost crunch. It’s a good idea to be prepared with information about resources and programs designed to help first-timers. They’re going to need all the help they can get!
New Laws Will Shake Things Up
Of all the 2019 real estate trends to watch out for, this is the most unpredictable. We already covered a potential rule change that might affect the appraisal industry here. But the bigger question mark is how the revision to the tax code will impact buyers and sellers.
The general consensus is that buyers at the top end of the market will be hit hardest. It’s also not clear whether the larger standard deduction will make the homeowner’s deduction less appealing. For now, we’ll have to take a “wait and see” approach to how the tax code changes will shake out—and shake up the real estate industry.
