Whether you’re thinking about entering the housing market, selling your home, or buying a new home, knowing the market trends for 2018 is a great idea. As it does every year, the real estate landscape changes. Here is what to expect in 2018.
Buying a home during the first half of the year may be difficult due to the shortage of inventory continues. For the past three years, many homebuyers have struggled to find homes that fit their criteria. Beginning in the second half of 2018, the inventory of homes on the market is expected to grow. This growth in inventory would be the first net inventory gain since 2015, meaning the housing market would move in a great direction for potential homebuyers.
People who hope to sell their home in 2018 are expected to have an even easier time than they did in 2017. The prices of homes have continued to climb in recent years and should continue to do so in the new year. Only 8% of homeowners are planning to sell their home in 2018, according to a survey done by Trulia, even though it would be a great time to do so.
In 2018, millennials will continue to struggle in their attempts to enter the housing market. As the generation enters their 20s and 30s, they are reaching a point where they would like to settle down. Many millennials have seen their income grow and are able to take on larger mortgages. Mortgage rates are expected to rise to 5% by the end of the year, so they shouldn’t wait too long.
Renting will likely continue to be a viable option for many looking for a place to live. While you can't expect any sudden declines in rental rates for luxury buildings, you will be able to expect to have an increase in negotiation leverage your lease. Bargaining power will increase further for renters if more people do decide to buy homes in 2018. This power doesn’t simply apply to rent, as many of these property owners offer incentives, such as free rent for a month and free parking spaces.
Tax reform, currently passed by the House and the Senate, could bring changes to parts of the real estate market. The largest changes would come to coastal regions that have the highest property taxes. California could be affected quite a bit by changes made in the tax reform. This uncertainty as we wait for the final form of the bill to be passed could cause hesitation in people hoping to buy or sell their home.
The new year will bring changes that may affect you in a good or bad way. Being aware of what is happening is the best way to assess what your next move should be.