Housing Market Update – January 2019
2018 Market Recap
So we all know 2018 was quite the interesting year, both economically and globally. For nearly a 5 1/2 years we experienced an upwards run of the real estate market values. The real estate market not only returned to their previous values post 2008 (2005 being a record year) but in some cases, the values just kept growing. The low interest rates along with a healthy economy, restored economic growth for most everyone.
The Shift of The Market
So what happened? The market did what it always does. It shifted. Actually, it is quite normal and was needed. To have a real estate market that just keeps exceeding is good for a while. It causes growth, movement and change. The market however does self correct, which is what this one did. At the time of this change, I was working in Newport Beach, where the prices are already more expensive than most areas. Before the correction, I was seeing listings out at $500,000 – $1,000,000 over what most would consider a fair market value for the property. This correction begins a new trend of a “Balanced Market”
2019 Real Estate Market
So here we are with 2019 just starting. The real estate market is still moving, but at a different pace. I think people jump to conclusions too fast and want to call this current market a “Buyers Market” which it certainly is not. It is a “Balanced Market” which is a good thing. It levels the playing field for everyone involved. Being a balanced market means that supply and demand are simply “balanced”. While there is more inventory on the market, home prices need to be at “fair market value” to move as the buyers are very selective as to what they are purchasing….so your listings need to be dialed AND marketed. If we were in a buyers market, the buyers would be calling all the shots, which they don’t at this time. They simply have more to choose from making the competition more fierce.
Fear of a 2008 Repeat
Everyone speculates about where the market is headed and I have heard WAY too much about the 2008 meltdown. Being in this industry for over 25 years, I have seen my share of turndowns and trust me 2008 was a long time coming. There is no precedence for a 2008 repeat. Any speculation would be about a recession, which in all honesty is only brought about to keep the economy from slipping into the inflation bracket. Nobody wants that. Any possibility of the market doing what happened in 2008 is off the books. The 2008 financial crisis was perpetuated by the mortgage industry. Lending guidelines are no longer what they were and trust me the financial industry has had it’s greed placed under strict control.
Predictions for The Real Estate Market 2019
Here is the real scoop. Home prices are slated to still appreciate about 3.9% over 2019. This percentage will adjust according to the market you are in. Also keep in mind that this appreciation/increase will only be based on fair market value priced homes. It does not increase on already over exaggerated priced homes. Those will sit on the market. Along with that, both Fannie Mae and Freddie Mac are predicting a gradual increase of the interest rates up to the mid 5’s before the end of 2019. When you look at all the factors, we are still in a great economy with steady growth.
My Best Advice – Being 25 Years in This Business
My advice to those in the real estate market looking to sell or buy is this. If you are thinking about selling, don’t try to time the market and wait for the “perfect time or season”. The real estate market kept a steady pace through the holidays, so don’t worry about timing. This market is still ideal to sell your home. Three important factors to keep in mind are PRICE, PRESENTATION and MARKETING. With those three being in line, your house will sell. For buyers, you want to purchase at “fair market value”. Don’t wait for a shift in the market. If you wait for a big price reduction it will usually coincide with interest rates being quite a bit higher, which calculates to larger monthly payment.
This blog may be longer than most as I wanted to give a good outline of what the 2019 market is predicted to do. Many economists and financial forecasters are saying it will be like 2017, which was a healthy market. Trust me on that as I do my research. All in all, 2019 should be a wonderful year of growth and change. We are in a great economy with lots of promise. Just don’t be one of the negative thinkers out there waiting for the sky to fall. The ones who don’t believe that are the ones who grow!
By: Holly Young
Holly Young Properties