In large, urban areas, costs of housing seem to keep rising and rising with no end in sight. However, with the 2008 housing crash in our past and the fact that prices can’t continue to rise forever, people are speculating about what the real estate market might look like later in 2019.
2018 was a turbulent year for the real estate industry. Because it was difficult to predict trends, many are wondering what lies ahead. Buying a home can be a challenging process, and the end result has a huge impact on buyers’ lives. When, where, and what they buy all has an impact on their financial future and happiness with their home. For this reason, it’s very important for buyers and sellers alike to understand how market trends affect property values. Real estate professionals need to have an in-depth understanding of emerging trends so that they can ethically and competently help potential buyers and sellers.
So what can we expect for 2019 in the housing market? Here are some predictions.
Poverty Is Affecting the US Housing Market
In areas like Silicon Valley, where even modest houses can fetch over a million dollars, it might seem like poverty isn’t much of a factor. But the truth is that suburban poverty is on the rise and we’ll see that reflected in the housing market in the coming year. Of the more than 320 million people living in the United States, there were around 43.1 million citizens living in poverty in 2015, according to the U.S. Census Bureau.
Why is suburban poverty becoming such an issue? Cities are becoming too expensive. People have been forced out of urban areas to the suburbs—or even further. However, they often need to commute into the city for work, raising their expenses yet again. Gentrification has many ramifications, making it harder for people to afford real estate and forcing them to rent. As poverty rises in neighborhoods, property values are likely to drop, leading to fluctuations in the market.
Finance and Real Estate in 2019
Over time, the housing market fluctuates, and people who are able to buy during a downturn can often get affordable housing. In 2019, however, it’s likely to remain difficult to enter the real estate market. Inventory is expected to increase in large cities, but only at high price points. Entry-level home inventory will still remain low.
On the finance side of real estate, mortgage rates could hit 5.5% in 2019, while home prices may rise around 2.2% overall. There are likely to be fewer bidding wars, meaning that sellers will need to price more competitively, but that they will still be able to get a good price for their property.
Preparing for Golden Years in the Current Real Estate Market
If you’re worried that your retirement nest egg won’t be enough to last your lifetime after you leave the workforce, many retirees are already feeling that pressure. Because the cost of living in the United States has been rising, many aging Americans’ savings aren’t giving them a comfortable life in their golden years. In fact, under 25 percent of Baby Boomers feel that they have enough money to get them through their lifetime.
Because Baby Boomers are becoming concerned about finances again, many are re-entering the workforce and taking on second careers or part time jobs. Some are downsizing to save money or to be closer to family and friends. Others are ditching the mortgage entirely and traveling, either by RV within the United States or country-hopping. This is changing the economy significantly, as it means inventory shifting and different priorities for older homeowners or prospective buyers.
The Future of the Housing Market in 2019
These changes in the housing market won’t mean that it’s impossible to become a first-time home-buyer in 2019. However, prospective buyers will need to understand all the factors that influence the value of properties they’re looking at, now and in the future. And who will be the driving force behind the housing market in 2019? Millennials, who are starting families and making more money. They’re likely to take on about 45 percent of mortgages in the upcoming year. Regardless of the state of the market, people will always be buying and selling.
