Housing Market Influencers for 2018
February 13, 2018 | nella
The housing market experienced quite a bit of change in 2017 and developments forecasted for 2018 seem to follow suit. The realtor.com® data team reviewed historical data and other economic indicators and has put together a forecast of what is in store for this year. From housing inventory shifts to price increases to generational and regional changes, here are a few of the most prominent trends that are expected to restructure the real estate industry in 2018.
Housing Inventory Shifts
After three years of dramatically impacting shortages of homes for sale, the realtor.com economics team is predicting that the shortages will finally ease up in the second half of the year. Danielle Hale, Chief Economist for realtor.com says the beginning of the year could still be a bit challenging for buyers, but there is expected growth in inventory.
Increases in new home construction are expected to be the driving force in bringing more homes to the market.
Millennials Entering the Housing Market
Though the housing market will continue to present challenges for millennials looking to enter the housing market for the first time, Hale says millennials seem to be having an increased amount of success at taking out mortgages on homes at varying prices. “They’re at that point where they’re seeing their incomes grow, and that will help them take on bigger mortgages,” says Hale. “That is because of both the overall strong economy and their own career development.”
Millennials represent the largest generation in United States history. As they reach the stage of life in their 20s and 30s when they are settling down and starting families, they are particularly motivated to buy a home.
Southern Region Expected to Lead Sales Growth
When it comes to home sales growth, the South is expected to surpass the national average in 2018. Some markets are expected to see 6 percent or higher growth, compared to an expected 2.5 percent growth on a national level.
The South has been attracting corporations and individuals with comparatively lower cost real estate, moderate temperatures and style of living in general.
Tax reform is expected to affect different people in different ways. The Florida Chamber of Commerce says the tax overhaul is a plus for businesses looking to relocate to the Sunshine State. The Florida Chamber pointed out that people moving to Florida from seven states in the Northeast and Midwest regions brought with them about $80 billion in income between 1992 and 2015. The states include New York, New Jersey, Illinois, and Ohio.
Ten years after the real estate market crash, prices are back up, but the market is very different. The challenges of limited inventory and other developments will not disappear overnight, but with the economy remaining on a strong trajectory of growth, homebuilders helping to ease the pinch of shortages, tax reform luring businesses and individuals to Florida, and the influx of millennials expected to enter the housing market, the future of housing in Florida is looking bright.