The 2018 market was full of ups and downs, and now that we’ve entered another new year, it’s time to review the current direction of real estate in our area. The year began with sky-high home prices, historically low mortgage rates, and a definitive upper hand for sellers. But, in recent months, things have changed. Home prices have faltered, rates are at the highest they’ve been in eight years, and the market has begun shifting in favor of buyers.
This doesn’t mean we’ll see a recession in 2019, but we are definitely in for a slowdown. Mortgage rates are projected to hit at least 5.5% by the end of this year. In other words, monthly mortgage payments for new buyers will be 8.8% higher this year than in 2018. Sellers, too, will be affected—the average appreciation rate is expected to slow to just 3%, despite increased inventory.
**<div class="pullquote">“2018 year began with sky-high home prices, historically low mortgage rates, and a definitive upper hand for sellers, but things have now changed.”</div> **
But while the number of available new construction and resale homes will rise, especially in higher price points, the supply of foreclosure properties is set to diminish.
The bottom line is that sellers will need an aggressive pricing and marketing strategy in order to succeed, while buyers will have greater leverage than in the recent past. In either case, having an experienced real estate team by your side will be key, and we would be happy to provide that service for you.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.