What’s the latest news from our market? Interest rates are down, inventory is up, and appreciation is predicted to keep rising in the coming months. Today I have some key statistics regarding these trends to give you a more thorough snapshot of our market and what we can expect moving forward in 2019.
Starting at 0:29 in the video above, we see that interest rates shot up at the end of last year, but since December, they’ve been dropping. In fact, right now, they’re the lowest they’ve been in three years. These low rates spur buyer demand not just from first-time buyers, but from current homeowners who need to put their home on the market in order to buy their next one.
At 1:10, we see that investor purchases are driving up inventory. According to CoreLogic, 20.8% of all starter homes, 7.8% of all move-up homes, 6.3% of all high-end homes, and 11.3% of all home purchases in 2018 were done by investors. It’s not just institutional investors who are doing the buying, either—mom-and-pop investors are also leading the increase in home purchases. Ralph McLaughlin, CoreLogic’s deputy chief economist, had this to say:
“Investor buying activity in the U.S. is at record highs. And our records go back confidently about 20 years. What’s going on and why? Well, it turns out, it’s not the big institutional guys that are leading the increase in home buying. It’s actually the smaller guys. It’s those that have bought between one and 10 properties over this 20-year period. They’re the ones that are really leading the increase in investor home buying.”
Mom-and-pop investors aren’t just buying properties for single-family rentals. They’re buying them, flipping them, and adding more properties to the market.
Finally, at 2:47, we see that our rate of appreciation was at 3.5% last April, which is down compared to the 6% mark we saw in July 2018. This is more in line with the historical average of 3.6%, but more importantly, experts are far more optimistic about appreciation rates now than they were 90 days ago. At 3:19, we see that CoreLogic predicted an appreciation rate of 5.6% for July.
I don’t think we’ll return to the 7% and 8% appreciation rates we saw previously. We’ll most likely bounce around between 3.5% and 5.5%. The reason for this turn is that demand picked up due to the decrease in interest rates.
According to Danielle Hale, Realtor.com’s chief economist, “Lower mortgage rates, higher wages, and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”
The bottom line is this: The window of opportunity is going to disappear, so you have to take advantage of it now.
If you want to learn how to sell your home quickly and for top dollar, be sure to attend my next Home Selling Sharks seminar on October 12 at the Hilton Garden Inn in Fort Washington. I’ll also be giving away autographed copies of my book “Home Selling Sharks.” To find out all the details, visit http://www.homesellingsharks.com/seminar-details/ or just give me a call.
If you have any other questions about our market, feel free to reach out to me a swell. I’d love to help you.