After a 20% run up in market values early this year, we’ve settled back to a more normal 4-8% gain in home prices over 2017 values for most of our region. Buyers and agents have been asking when will we see a return to a more normal market for the past 3 years. It’s here now! Open your Christmas present!
I don’t expect 2019 to be a blockbuster year for home appreciation; likely in line with where 2018 finished for an overall rate of appreciation. Many economists are expecting 2019 and in to 2020 to be a business cycle slow down. We have stock market uncertainties, new Congressional uncertainties and a normal business cycle slow down all upon us. It’s not bad news or even a bad thing, but it does mean slower, steady appreciation.
That said so much of our local market operates by “herd mentality”, where if you’re not buying then maybe I shouldn’t either, that many will watch this opportunity pass them by. This is the time to be stretching in to your dream home or location. The gap between where you are and where you want to be is likely closer now than it will be in and beyond 2020. For first-time buyers or those really wanting to scale down, prices are more affordable than they have been since 2016. Why not act now?
While this may not sound like great news for home sellers, the reality is we are still 25+% over 2016 home prices. Smile, be grateful for your wisdom to have bought when you did and sell now, if that’s really what you want to do. If you can wait another 2 years, you may be in a stronger negotiating position; but if you’ll be staying and buying in this general area, you have more flexibility in negotiations now than you will then. If you want to maximize your present home’s value and 2019 won’t be the year for you, spend some time making improvements to your home now to maximize it’s value in 2020 or beyond.
All of the local employers are expanding their building spaces and making plans for more employees by 2020 and beyond. There are millions of square feet being added which means 15,000+ new employees will be coming here. Now and into early 2019 is a Christmas gift opportunity to be opened. Who cares about the herd. If you have a need or desire to buy, we have and will have more homes for sale than we’ve had in 4 years. More choices, better prices and less competition. Why wait?
You think prices will fall even further? Possibly, but our rise in interest rates will quickly take away even another 10% drop in home prices. Interest rates are rising, not terribly but upward is the now and the trend for the future. Your payment will likely be higher, even if the home price is lower. I never encourage you to move just to “time the market”. This is no exception; but as I said, if you have a need or desire, then make now your time to do it. Good condition homes still sell quickly; maybe not in 24 hours with 24 offers but in 2-3 weeks with strong buyers. It’s still a great market for sellers who want to sell.
If you want to buy an investment home or start planning a home for your retirement, this coming year is a great opportunity. Not for flipping houses, but investing in them. We will see a steady increase in new hiring as the year progresses and all of the new office buildings come to completion in late 2019 and into 2020. These new hires will likely be coming from out of the area, needing a home and driving up demand and prices. Closer in, more urban properties will bounce back more quickly, so current prices have the most room to bounce back up. Our luxury market will be slower to come back. We have a tremendous amount of $1.5M+ homes on the market and likely more resales coming in 2020 and beyond. This could make 2019 a good window to capture your gains in and smile at your wisdom.
The local economy is strong and resilient. I don’t see big problems or concerns regarding housing or employment for any of us in our region; but for some the sun is shining on an opportunity that too few are recognizing. Call me if you want to discuss your plans.