Looking to the future: Emerging trends in the real estate market
With new year’s resolutions underway (and possibly already abandoned), we turn our attention to the real estate market in 2018. Many are wondering whether the market conditions will favor them in the coming months.
What we saw in 2017
Although the real estate market in South Florida had Mother Nature to contend with, the market bounced back quickly and saw large gains in October. After delayed inspections and appraisals, luxury single-family home sales increased significantly and luxury condominium sales rose by nearly 10%. These facts are reason for optimism heading into the new year.
What to expect in 2018
While real estate remains unpredictable at the best of times, here is a list of three things to watch for in the coming months:
The volume of home sales will rise significantly.
In 2017, home sales rose by nearly 4% to over 5.5 million, and in 2018, sales are expected to rise once more by nearly 3% to just under 6 million. The reasons for these predictions include a soaring stock market, an increase in employment, and a boost in consumer confidence.
Homes will likely be snapped up quickly by eager consumers, so prepare for a competitive market in 2018. Homebuyers can expect prices to rise along with demand, but there are steps you can take to give yourself an edge. Here are a few tips that will help you get your foot (and family) in the door:
- Get pre-approved for a fixed-rate mortgage to demonstrate how serious you are as a buyer
- Prepare a significant downpayment (10% is good, 20% is ideal)
- Personalize your offer by explaining the reasons you want to buy the home
- Ensure you have the best agent available to you
Boomerang buyers are back!
When the recession ended in 2009, millions of Americans had been forced into foreclosure by the housing bubble. Given that the waiting period after a foreclosure is typically seven years, millions of potential buyers are now primed to re-enter the market.
The numbers indicate that 1.5 million Americans are now eligible to return to the housing market. This means even more competition – great news for homeowners, but not so much for homebuyers.
Rates are going up…but at a manageable rate.
There were major concerns that mortgage rates might spike in 2018, but the data tells a different story. The average 30-year fixed mortgage rate stands at 4.0% according to Wells Fargo and indications are that any increase will be less than 0.50% in 2018.
In addition to the moderate mortgage rates, banks are expected to be more generous in 2018. After years of restrictions and lending limitations, more diverse loan packages are expected to be available in 2018.
So there you have it. Good news for homeowners and homebuyers alike as we begin 2018.
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