The simple truth is that markets are like the weather—you can’t predict with absolute certainty how they will act, but you can get a sense of the direction that the winds of change are pushing things.
The economic research team at Realtor.com pored over a wealth of housing data to come up with a forecast of what’s in store for 2019 on both the buyer and seller side. Four key trends came out of that report, and we’ll discuss them today.
For one thing, Realtor.com found that inventory, especially in the luxury market, will continue to swell. For years now, buyer demand has far outpaced supply, and because of this, market inventory has been tight. In fact, inventory nationwide hit its lowest point in recorded history this past winter. And finally, we’re beginning to see a recovery.
That recovery period is expected to continue into 2020, but we don’t expect inventory growth to go gangbusters—less than 7%, to be exact.
This is welcome news for buyers who’ve been stuck on the sidelines until now, but sellers are left to confront a new reality: While nationwide inventory growth is shaping up to be modest, it’ll be another story in the upper price ranges. In these markets, most of the expected inventory growth will be derived from luxury homes.
“First-time buyers will be met with challenges, but those looking to sell their home and purchase a higher-priced property will reap the dual benefit of greater equity and selection in 2019’s market.”
It’s no secret that sellers have been sitting pretty for a number of years. Could the scales be tipping in favor of buyers now? The answer is yes and no. Thanks to increased inventory, life will be a little easier for buyers shopping for a new home. The combination of rising mortgage rates and appreciation, however, doesn’t bode as well and means that buyer affordability will remain a major pain point.
Third, millennial buyers will be the prevailing force in the market. Thought to be the new kids on the block just a few years ago, millennials are now the biggest generational group of homebuyers, making up 45% of mortgages. In contrast, baby boomers and Gen-X’ers account for 17% and 37%, respectively. Some of those millennials are even in the market as move-up buyers.
As mentioned, first-time buyers will be met with challenges, but those looking to sell their home and purchase a higher-priced property will reap the dual benefit of greater equity and selection in 2019’s market.
If you have any questions related to today’s topic or your real estate needs, please reach out to us. We hope to hear from you soon!