January Market Update

WHAT DOES 2019 HOLD IN STORE FOR THE REAL ESTATE MARKET?

The 2019 forecast calls for partly cloudy skies, some sun, and a chance for rain, according to an analysis by the Realtor.com economic team. NAR chief economist, Danielle Hale makes her predictions as we end the current year.

• While higher prices may become the rule of the day, Hale predicts more inventory than 2018 had to offer. Builders will find it necessary to set higher price points in higher cost areas, while it remains to be seen if middle and entry-level markets will
become more affordable.

• Other factors may make home affordability a challenge, including rising interest rates. (Today’s buyers never experienced the double-digit interest rates of yesteryear, so they are a bit spoiled, after all.)

• Millennials are no longer the new kids on the block. They ARE the block. In 2019, they will constitute the biggest generational group of home buyers, with 30 becoming the key age to dive into the market. The oldest group of millennials (late 30s) are already enjoying the rigors as well as the delights of home ownership.

• It’s unclear how the new tax code will affect the real estate market, according to Hale. She predicts that since taxes don’t get filed until April, it’s anyone’s ball game how the new tax arrangements (standard deduction or itemized) will fare for the average home buyer and homeowner.