Every year, professionals keep an eye on market trends and try to discern what the next year will bring. Both buyers and sellers are looking for answers in hopes of either finding their dream home at a great price or getting a return on their investment that was made years prior. The question is, is now a good time to buy or sell and who will come out on top in the end? Selling a home in 2018 may be best for sellers and buyers will flock in by the hundreds.
Selling a home in 2018 may require a bit of research, a better understanding of the market and a willingness to sell fast.
A Seller’s Market
A seller’s market is what happens when there is a low inventory of homes available and a high volume of buyers looking to make a purchase. 2018 is looking to be another year for the seller with availability low and want high. The buyers? Millennials who are finally ready to move out of the cities and into the suburbs. What this means is, private and institutional sellers will be able to keep prices high and first-time buyers will need to choose carefully. “Clearly, 2018 appears to be another seller’s market,” Says Mark Fleming, chief economist at First American Financial Corporation. “The shortage of supply relative to increasing millennial demand will not change (in 2018). In fact, it may be exacerbated as more millennials decide to become homeowners and more sellers become prisoners in their own homes, as mortgage rates rise and fear of not being able to find something to buy increases.”
Private Sellers Benefit
There is another competitor in the housing market that private sellers need to worry about – corporations. Home building is moving fast and houses are popping up in areas far from the cities. However, that may become a problem for the millennial buyer because being farther from the city means longer commutes, less to do, and not much to look at around the homes. The benefits of moving farther from the city are cheaper housing, bigger, better homes for less, it will be up to the buyers to weigh their options. Private sellers will have an advantage here though because they already own properties closer to the cities. Redfin’s 2018 housing market forecast shows that 25 percent of homes sold within two weeks or less during the peak season of 2017. The study also showed that one in five homes, or 19 percent, left the market in less than a week.
Market forecasts are also showing a rise in mortgages. On average, 4.5 percent rise by the end of 2018. The rise means two things, one, sellers may start to feel the heat to sell and fast. On the other hand, that rise could mean a growing fear among buyers, giving them room to negotiate even more. Luxury markets will most likely take the biggest hit if this comes to fruition. Neil Richardson, chief economist at Redfin says, “I think you’re going to see sellers have less pricing power that they did (in 2017), particularly in states like New York and California.”
What this all means is that selling a home in 2018 is a good idea. There may not be a better time to sell than now. While prices are high and demand is high, selling now is a good idea. There will be negotiating and sellers may not get the initial price they are asking for but there also won’t be much of an increase in price. Economists agree that if there is a rise at all, it will be by 2 to 4 percent at max. Take advantage of the market while it’s still a seller’s market, there’s no telling how 2019 will look yet.