Knowing the housing market predictions for 2019 is crucial to getting ahead in your real estate business.
Some say “Change is the only constant” and in the mortgage biz, this couldn’t be more true. Whether you’re ready for it or not, change will come, and we all have the choice to either adapt or move on to another industry. The reality of the housing market right now is that there’s still an affordability issue. Even with the economy doing well and interest rates staying relatively low, the affordability and availability of homes is still a struggle. Some experts are optimistic in their housing market predictions for 2019 while others are a bit cynical. Wherever you’re at on the spectrum, it’s safe to assume that many of the same things that characterized last year’s market will follow us into the new year.
5 Bold Housing Market Predictions 2019
1. New construction will rise
Despite labor shortages, new home construction is predicted by many industry experts to continue rising. This makes it especially crucial for real estate agents to make connections with builders and mortgage lenders that work closely with builders. There are many benefits to having those kinds of connections in general, but this year, it will be particularly important to proactively make those connections. Though labor shortages may prevail, when builders start hiring again, you’ll be in their contacts list and set up to do business with their clients.
Here’s a shameless plug: did you know that Cardinal Financial works with builders? We provide fully underwritten approval prior to contract as well as flexible lending terms and products for home buyers who are purchasing newly constructed homes. Plus, we issue automated loan status updates at all important checkpoints for home buyers and real estate agents. What’s better than working with a mortgage lender that knows your pain points and anticipates your needs?
2. Home prices will increase
While housing labor is experiencing shortages, the opposite is predicted to happen with home prices this year. Scotsman Guide recently wrote, “Builders are grappling with increases in the cost to build homes, and this is directly impacting inventory by keeping it persistently low, which also is driving home prices higher.” So although it’s becoming more expensive to build new homes, that’s not the main reason why home prices are predicted to increase. It’s the labor shortages.
In that same article, Scotsman Guide also reported, “It is mostly a lack of available labor, which is the result of multiple factors, including a construction labor force that is not growing fast enough to keep pace with demand and a large redirection of the existing labor force to areas in the country affected by natural disasters.”
At Cardinal Financial, we can get your clients fully underwritten right up front—even without a property address. This gives home buyers the confidence to go in with a strong bid knowing they’re a few steps ahead in the process. And when their offer is stronger than others, it gives both of you an advantage over the competition. Especially in a seller’s market, full up-front underwriting helps seal the deal faster. And it can get your clients to the front of the line if there’s a negotiation.
3. Millennials will drive the market
Each new year is only adding more Millennials to the force of home buying power. In fact, research done by Realtor.com states that “Millennials will account for 45 percent of mortgages in 2019.” This increased competition can make the market tough. Do you know how to reach this generation?
Top 3 Reasons Why Millennials Want to Buy
More than ever, home buyers are starting their home search online, and that includes Millennials. Plus, consumers are increasingly relying on not only the opinions of their friends and family, but of online reviews. This data begs the question: how is your online presence?
Networking and advertising have always been a challenge for real estate agents. But now more than ever it’s important to build a stable online presence. Do you have all the right tools to do it? If not, the good news is, we do. Cardinal Financial has an award-winning, agency-caliber Marketing team that creates hundreds of print and digital co-marketing pieces for real estate agents who partner with us. It’s a competitive market, but the right partnerships make all the difference.
Now more than ever it’s important to build a stable online presence. Do you have all the right tools to do it?
4. Rates will increase steadily
Each time the Fed raises the 10-year Treasury yield, mortgage rates follow closely behind. We saw it happen twice in 2018 and there’s a good chance it’ll happen again in 2019. But when it comes to rates, keep in mind that, as the Scotsman Guide wisely points out, “regardless of any incremental increases, rates are still at historic lows.”
And that’s good news for real estate agents. It could mean that renters won’t be completely turned off from the idea of buying a house this year. That means your business doesn’t have to suffer. You may have to scour the listings a little more to find the right home at the right price but it’s still possible. The key this year will be managing your clients’ expectations and reminding them that, if homeownership is their goal, they might not get everything they want in their first home.
The key this year will be managing your clients’ expectations and reminding them that, if homeownership is their goal, they might not get everything they want in their first home.
5. 2019 will be a seller’s market
The last of my housing market predictions for 2019 is that this year will be a seller’s market. With the economy still going strong, rates and home prices rising, and demand increasing, we’re likely to see a housing market much like the one we had in 2018. Last year’s peak season was arguably a seller’s market exhibiting all those same characteristics.
It could be a tough year for buyers and sellers in the sense that neither of them is likely to get everything they want. But sellers are predicted to continue to have the upper hand. Realtor.com says, “We don’t expect a buyer’s market on the horizon within the next five years.” Still, don’t give up on home buyers. They’re only going to need an awesome real estate agent on their side more than ever before.
How to Win in a Competitive Housing Market
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