What to expect in the real estate market for 2019
Over the last several years we've seen a very strong sellers market across most of the US. Low inventory, large competition from flippers and SFR buyers and a generation shift toward millennials outpacing baby boomers in population.
Here's what we're expecting to see in the market for 2019:
Continued increase in prices with a decrease in overall inventory
Home prices are still on the rise but at a much slower pace than that of the last several years. Even still, affordability will continue to be a major issue for most metropolitan areas, Looking at the pipeline for new home builders tells the same story we've seen all too often: not enough new homes being developed and the new homes that are hitting the market have prices increasing at a much faster pace than the current wage growth.
While affordability will continue to get worse, especially for first time home buyers, most millennials at this point, the other major factor will be the rising interest rates which are currently at a 7 year high and expect to rise by at least another half percent before the end of the year.
As millennials rush the market in their 30s, student debt becomes an issue for most, as saving for a down payment, whilst renting and paying off loans becomes near impossible for most, however, millennials will still be the largest group entering the market in 2019.
We are expecting some big shifts in the technology people use to buy and sell their homes in 2019. we've seen several counties scattered across the US have switched their recording and land deed management over to blockchain technology, we expect more counties to adopt this technology as it's considerably cheaper, faster and more efficient than traditional methods. With other real estate related transactions happening on the block chain we expect to see more sites like xxxxxx list and sell property for crypto currency.
Real estate investors should see a larger number of SFR homes developed over 2019. Homebuilders are currently shifting toward smaller lots and home builds to reduce costs and tackle affordability, though these homes end up being perfect for single family rentals. Along with SFR, land entitlements will become a more popular real estate investment, home builders are struggling to fulfill their current demand for usable, zoned land so expect to see more funds focusing on the entitlement side of the business show up in 2019.
While California continues to remain the countries hottest housing market, the metros in the south aren't far behind. A recent report from Zillow ranked the top 10 hottest housing markets for 2019, taking into account many factors, including wage growth, growing populations, low employment rates and home values to establish their top 10..
San Jose topped the list as the hottest housing market for the second year in a row, but the rest of the list shows a ver clear shift in the overall housing market. While silicon valleys hot job market helps propel the region's housing market the trend is beginning to shift away from the west coast toward the south and south east citing affordability as one of the key triggers for the shift. Both young and old look at home prices as their first priority when buying a home, some of the highest earning metropolitan areas and booming earning markets, like Orlando, Minneapolis, Dallas and Nashville top the list for 2019.
Whatever comes our way in 2019, Ettro Capital is prepared, with a strong deal flow pipeline expected to make this year our best to date. we would love to discuss your real estate investment needs, we make real estate investment simple and would love to show you how. Contact us today to learn more or subscribe to our newsletter for market news, updates and more.