The numbers are in, so let’s take a look at how the market has been doing and where we can expect it to go.
I am back with your hot-off-the-press market report! Summer is around the corner and buyers are out shopping for their next home. Let’s take a look at the real estate market in your area to see where it is going this year.
Everyone said that the tax reform was going to kill people’s desires to purchase homes. But according to the numbers, the first few months of the year were overall equal to where they were last year. There is been no major dip, and the only reason they are not well above last year’s mark has nothing to do with the tax situation. It has to do with the fact that there is not enough inventory.
Looking at buyer traffic from January, February, and March of 2018, we can see that it increased in each month compared to 2017. Interestingly enough, Gallup just released a poll showing that the American people see real estate as the best long-term investment, better even than stocks, bonds, gold, and savings accounts.
For the first time in eight years, home ownership went up. People want to buy houses. Arch Mortgage Insurance indicated that even recent interest rate increases and higher taxes on some upper-income earners did not shift the market like they had feared.
We can see that the market is still very strong, notwithstanding the lack of inventory. It is a matter of supply and demand; if you are in a market where supply is decreasing at the same time that demand is increasing, the price of that item is going to go up. That is what we have noticed over the past 12 months: home prices continue to rise across the country, with expectations of continued economic growth and future employment gains. The current run of rising prices is likely to continue.
In terms of the year-over-year change in price (according to price range), homes in the low to middle price ranges are up 8.5%; middle to moderately priced homes are up 7%; and higher-priced homes are up 5.4%.
According to the NAR’s Housing Affordability index, affordability today is higher than it was between 1985 and 2007. The only reason affordability is down in relation to the last eight years is the bust and recovery periods; we were selling distressed and short sale homes that were selling 50% to 80% on the dollar. Overall, the country’s affordability is still in really great shape.
Even though rates and prices are increasing, so are our incomes. Rental prices are also going up. According to Zillow, the median rent countrywide rose 2.8% over the past year, the fastest pace of appreciation in two years. Many families in the U.S. are spending more than 50% of their income on their rent. Rising rent is a trigger for renters to transition to homeownership—overall, two out of three renters under the age of 50 say that they want to own a home.
This month’s price index comes with great news for homeowners who are thinking about selling their homes and providing much-needed inventory for buyers, including those who are looking to make their first-ever home purchase.
If you have any questions or would like to sell your home, please feel free to reach out to me. You can also attend one of my next free home seller seminars on June 12 at the Hilton Garden Inn, where I will give you great strategic information on how to make more money while selling your home stress-free.