In a previous  post, we discussed some trends that may occur in 2018 that would need a keen eye, because they could serve to be potential boosts to your real estate results. Think of this post as an addition to that knowledge.

We have identified a few more noteworthy possibility that may take precedence in 2018 and cause a real stirrup in the market!

From housing inventory to price appreciation of those houses and generational shifts, 2018 may be the shift in the breeze we have been looking for!

  1. To kick this off, we are going to talk about the supply finally being met!

    The past three or so years there has been a shortage on homes by comparison of demand. This won’t be solved right away in 2018 however there is reason to suspect that in the second half of the year we can see an easing up on the market because we will be able to meet the supply of the housing demands.
    There is potential for would-be buyers to finally shift into home owners in a manner that meets their needs and budget.
    The for-sale housing inventory has been tight, and will still reach an expected 4% year-over-year decline in march, however, if the increase that is expected to happen in the second half of the year does occur, it will be the first positive net gain since 2015.Bullish construction is the reason for this possible turn around, by bringing new homes to the market, rather than shift around people in existing homes, there is an opportunity for people to trade up into new homes.
    The relief is expected to occur in the upper tiers and make its way down to the lower tiers because of the new vacancy of those upper tier homes. Specifically in the beginning, the mid and upper tier price ranges of $350,000 and up will see the changes and then so on down the tiers.
    Because of the market relief, home prices are expected to slow down to a 3.2% growth year-over-year nationally. As a note, just because the appreciation is slower, doesn’t mean the prices won’t rise.
    As an overall, prices are expected to increase in lower priced homes, but when the last half of the year hits, things will start looking up.
  2. Millennials inbound 

    The housing market will still be difficult for millenials to break into, what with student debt and all, however they ARE in for a treat.The success rate for millenials taking out a mortgage on homes is high and at varying prices, and this is for more than starter homes. The millenials are reaching a point where they are seeing their income grow and they will be able to take on larger mortgages. This is in part due to the overall strong economy and their own career development.
    Since millenials are the largest generation in U.S. history, when they do well, everyone does. As they reach their age of 20-30’s  they will start to settle down and start families, and this will result in the motivation to buy. Millenials could result in making up 43% of home buyers, taking out mortgages in the year 2018, which would be an increase of about 3% from 2017. This slight positive shift could have large effects and result in hundreds of thousands of additional new homes, rebounding the inventory in late 2018 and so on.
    Let’s hope they don’t wait too long to purchase a home either, there is an expected rise in mortgage rates  to reach about 5% by the end of 2018 thanks to stronger economic growth, inflationary pressure, and monetary policy normalization.

Millenials and abundant housing options, who knew? 2018 is already chalking up to be a curious year with a lot of potential. Let’s keep our fingers crossed and eyes open!

As always, we at Kontor are here to keep you ahead of the curve! Give us a call or send us an email and let’s work together on building YOUR rise!

Phone: (612)567-1810


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