Looking Ahead: The Housing Market in 2018
2017 was a year of major growth for the housing market. It was a year of consistently increasing home prices across the country that solidified the recovery of the industry as a whole. 2018 is shaping up to be a close reflection of this past year, which means things are looking pretty good for homeowners looking to sell. So good, in fact, that analysts are expecting even higher home prices in the coming year than originally projected. However, home prices in 2018 are shaping up to increase at a lesser pace than 2017.
The reason for the continuation of this seller’s market comes down to one thing: inventory. But more specifically, the lack thereof. Low inventory and high demand has been the continual cycle of 2017 and this demand has yet to dwindle. The main factor for this demand can be attributed to the strength of the US labor market. The American labor market is stronger than it’s been in decades, leading Americans to feel increasingly confident enough to buy homes. However, new-home construction and property listings aren’t keeping pace with consumer demand.
With new home-building stagnating as the pool of potential buyers continues to grow, demand is projected to continue growing. Analysts are hopeful that supply should increase somewhat, but there still won’t be enough new homes to meet this demand, which will continually contribute to higher prices. In the long run this could have a bigger effect on the affordability index, but for now analysts foresee that despite this inventory challenge, homeownership rates will continue to rise. And with this rise in homeownership, will also come an increase in home value appreciation. Specifically, Annual home value appreciation is predicted to grow anywhere from 1-5 percent as well.
The demographics of the real estate market are also projected to change a bit more in the coming year. Analysts are predicting that despite the low inventory and increased prices that the number of millennial buyers and international investors will also increase in 2018. Specifically, a 3 percent increase is projected to occur in mortgages originated by millennials in 2018. And with the largest millennial cohort turning 30 in 2020, this generation is expected to continue to increase market share over the next 3 years and beyond.
Mortgage rates are also expected to grow, averaging 4.6 percent and possibly reaching 5 percent by year-end. Overall, the forecast for the coming year is optimistic and it’s shaping up to be a good year for homeowners looking to sell. For more information on 2018 housing market predictions, click here.
Selling your Home in 2018
If you’re thinking about selling your home in Orange County in 2018, don’t wait until spring to list your home. Properties listed at market value throughout Orange County are getting a lot of attention and now is the time to take advantage of low inventory of housing throughout Southern California. Buyers are looking for the right home at the right price, and with less competition than usual it’s the best time to sell. With more than 30 years of local knowledge in South Orange County, I can help you sell your home at the right price. Recently named #10 of the top 50 Coldwell Banker agents in September 2017 within all of Orange County, I can help you buy or sell your home too. Call me at 949-500-9714 to get started.