Many continue to be concerned about "The Housing Bubble" and housing affordability. Home prices have been rising across much of the country. This does not indicate that we are going to repeat the ugliness of the recent years we don't want to discuss. It does indicate a substantial challenge in the long term health of the housing market. I predict the growth will taper off in 2018 which will help in many markets, but don't expect any bubbles to burst.
The good news, slowing home price growth should give us a nice improvement in the number of homes for sale in 2018. This will increase the number of sales over those of 2017.
First-time buyers will continue to play a substantial role in the nation’s housing market, millennials will get into the game, and interest rates will continue to keep us happy.
DELUCA'S TOP 5 PREDICTIONS FOR REAL ESTATE IN 2018
1. Millennial Homebuyers
Last year, I predicted that the big story for 2017 would be millennial homebuyers, and it appears I overshot the numbers a bit.
First-time buyers have made up 34% of all home purchases this year far below the 40 percent that is expected in a normalized market. Millennial buyers have special wants and needs. Although they are buying, they are buying in the less expensive regions of the country. California, and The Monterey Peninsula, not being one of the most popular locals for their purchases .
My prediction in 2018: The the number of millennial buyers will grow and continue to be a huge influencer in the US housing market. They are getting older, making more money I also believe that they will begin buying in more expensive markets. It really is just a matter of educating them on the benefits of homeownership as well as the fact that it is not a foreign language they can never learn.
Read The Blog: Why Millennials Think They Have To LIve At Home
2. Existing Home Sales
2018 should bring a reasonable increase of 3.7% in existing home sales, or about 5.62 million units. The inventory shortage will continue in many areas, but I predict a slight increase in inventory which will take a bit of heat off of the market. This housing shortage leads me to expect home prices to rise by about 4%.
3. New-home sales
There are a substantial amount of new home building projects planned. I predict New-home sales in 2018 to rise by around 8% to 655,000 units. The prices of these new homes should rise about 8%. We see this here at East Garrison and The Dunes with waiting lists and people showing up in droves for the lotteries. The many housing starts slated will increase sales although the numbers will still remain well-below the long-term average. The problem being that the cost to build has become so high that developers are having challenges building homes that people can actually afford to buy.
I do hold out hope that home builders will be able to help meet the high demand we’re expecting from first-time buyers, but in many markets it’s very difficult for them to do so due to rising construction costs.
4. Interest rates
Interest rates continue to surprise us all. The anticipated rise that many of us have been predicting for several years is still only a rumor.
From the research I have done, my forecast for 2018 is that interest rates will rise slightly. Although anything under 6% is still remarkably low when compared to historic averages. Don't be a spoiled brat and wait for them to go back down to where they were a few years ago, I don't see that happening, and we really don't want it to.
5. Tax reform
REALTORS® have helped to positively influence tax reform in some key areas. For example, both the House and Senate have agreed to maintain deductibility of state and local property taxes up to $10,000, to maintain Section 1031 tax-deferred exchanges in their present form for real estate investments. We still need to influence Congress to help make the tax reform bill more favorable to homeowners and consumers. Now that both the House and Senate have passed The Tax Cut and Jobs Act, a Conference Committee will begin to address the differences between the two bills. Important improvements in the legislation are possible by encouraging Congress to maintain the current law for the mortgage interest deduction and capital gains exclusion, and allow for the deductibility of state and local income taxes. Retaining the current law makes the bill more favorable to homeownership
SEARCH FOR HOMES
Search Homes In Monterey County by Bedroom Search Homes in Monterey County...