The Future of Real Estate – A Look at the 2019 Housing Market
No matter how much of an expert or prognosticator you may be about the housing market, there is no way to pinpoint what will happen in the future. Over the next few months, I will be asked what the 2019 housing market will look like. My answer will be the similar as it has been in the past couple of years…with a caveat – “The real estate trend and numbers tell me market will continue to be tight, especially in neighborhoods I specialize. Nationally however, many markets are showing signs of more fluidity as a number of homes on the market increases, sellers compete to sell and buyers have more homes to choose from.”
A large contingency of my colleagues in the business depend on their gut with a focus on making the next sale as a focus of their prediction. I lean on consumer behavior, a plethora of external factors, local legislation and local economics in addition to my gut to drive my answer. Here is a birds eye look at what I feel the 2019 housing market will look like in my opinion.
Home Sales Nationally Will Decrease
Due to increasing home prices over the past few years (home prices are up 4.6% year over year), many buyers may find themselves on the outside looking in. Yet, due to a slow shift in the marketplace, sellers will still have he upper hand and get more for their home than they would have last year. Experts say the number of homes sold will decrease 1.5% in 2019.
Inventory will Continue to be Tight in Many Markets
In California, as is the case across the country, homeowners are staying in their homes longer. This coupled with historically low housing starts in past years, has added to the lack of inventory.
There is light at the end of the tunnel. In 2018, housing permits were up almost 8.5% percent. This is a key indicator that the number of homes for sale in the future will increase.
New Tax Code Is Affecting the Market
For the first time in over 25 years, the overhaul of the tax code is having a direct affect on Real Estate. Those living in markets where home prices are higher will feel the greatest pinch as interest deduction is capped at $750,000 (down from $1 million). Capping property tax at $10,000 will also impact the market.
Will There be a Market Correction?
News headlines in addition to your next door neighbor may be telling you a recession is on the way. They aren’t wrong. Our economy has been on a good run for the past 10 years. A slowdown is inevitable. The question is, what will tip the scales?
I’m confident that Real Estate will not play a large role in any slowdown in the economy. There will certainly be a correction, but a soft one. Everything I see points to an overheated economy as a key factor to the next slowdown. And, I can say with relative certainty, there will be a correction.
Keep the Faith and Roll Forward
Everything we hear and watch in the news and social media tends to exacerbate what is
Buffini & Company Outlook for The 2019 Housing Market
happening in the world around us. If there was any suggestion I can make it would be – stay the course. Know that opportunity exists in every economic climate and do not consume yourself with things that are not in your control. The 2019 Housing market, especially in Southern California will continue to be a sound investment well into the future.
Here is a one-sheet that highlights much of what experts believe to be happening this year. It is definitely worth a look. I will gladly mail it to you. E-mail or call me and I will gladly send it to you.
Dave Harbison has been a Real Estate Practitioner in Long Beach and surrounding communities. He regularly contributes to blogs, news outlets and other media. He continuously provides insight to home owners, buyers and sellers in the Long Beach and surrounding communities. Dave Harbison Long Beach REALTOR® dave@davesellslongbeach.com
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