There is a lot of news going around about the real estate predictions for next year. As 2017 winds down, many of us real estate agents are looking towards the next year to be a very lucrative one. Rates are still reasonably low and many markets across the US are exploding. There's a lot of major markets that have very low inventory with pretty high demand.
Let's take a look at what a lot of economists and real estate companies predict for 2018.
Interest rates will go up about .4% and inventory shortages will drive the housing market. We are finally seeing and the fact from builders not making enough houses a decade ago. Are more millennial's coming into the real estate market and there's just not enough houses to supply the need. Economists predict that there will be 12% fewer homes to choose from nationwide that there were just a year ago and 51% of the active listings will be in the top one-third of all home values, and this might mean these homes are affordable for first-time buyers.
Builders will start to focus on entry-level homes. Just as they did 12 to 15 years ago, builders and developers will need to focus on entry-level homes for first-time homebuyers. This will jumpstart new buyers into the market.
Many homeowners will remodel their houses rather than sell and there will be fewer people looking to buy and even if you were looking to rent. This could be a big impact on home prices going into 2018. Many rental prices have increased exponentially over the last several years that it just makes more sense for people to buy.
Millennial's and young people will move out of their parent's basements and into the suburbs. I truly feel that this is a definite. More people, especially those 25 to 35, will be moving out of either dorm rooms, renting apartments, or their parent's houses and moving into their own house and the won't be renting either. Many of these millennial's will be looking to the suburbs for either a starter home or even a midsize home as long as they can afford it.
Home design will be driven by millennial's and baby boomers. This is the majority of the population right now and while many developers will be building starter homes built on a high-efficiency and practicality, many baby boomers will also be the driving force in home design. New homes and renovated homes will feature designs that appeal to both millennials and baby boomers such as wider halls, frameworks that make it easier to create additions, and stronger support beams able to be manipulated and manufactured into an appropriate design later on.
Home prices will finally slow down a bit. But, I said a bit because 2017 has already been full of record-breaking home price growth and incomes will not increase as fast as home prices. Many economists predict that home prices will climb about 4% in 2018, 1% higher than the normal but much lower than the current pace of nearly 7%.
Knowing what's predicted for 2018 can help buyers, sellers, and Realtors® work up a plan for the next year to fit their budget and their goals. Call me for all Columbus real estate and join me over on Linkedin where this post originated.