Mark Spain’s 2019 Real Estate Market Forecast
Reflecting on 2018, we have a lot to be thankful for! We are so humbled to have been able to serve over 2,700 clients in 2018 and look forward to helping even more in 2019. From expanding to Nashville, to being ranked the #1 team in the U.S. for closed sales by the Wall Street Journal for 2 years in a row, to making the Inc. 5000 list of fastest growing companies in America for the third year in a row, and reaching over 2,000 5-star reviews on Zillow, we are so proud of our team.
Check out Mark Spain’s 2019 real estate market forecast with everything you need to know from inventory trends to the changes we predict as the market continues to shift towards equilibrium.
Entry Level and Affordable Housing Inventory Will Remain Tight
The biggest challenge in the last two years has been the lack of affordable housing. As we move into 2019, the shortage of inventory on homes priced under $400K will continue to see pricing pressure. On the bright side, national home builders have retooled their products to offer entry-level housing which could help ease inventory issues. However, the rise of labor, construction and material costs have put pricing pressure on builders leading to a dramatic rise in the cost of construction and unwanted delays.
The Market is Working Towards Equilibrium
Generally, a market in equilibrium has about six months supply of housing. Currently, we are hovering around three months supply. We don’t see 2019 as the year we hit six months supply, however, we are definitely working towards it. In terms of supply and demand, we are seeing the best job market that we have seen in decades, especially in the Southeast. We are coming in for a soft landing as the market continues to equalize.
People Are Going to Start Holding Onto Their Money
We saw huge spikes in spending over the last few years, however, we predict people will start holding onto their dollars more in 2019. With inventory so low and prices so high, homeowners are staying in their homes for longer. With current market prices, it is much harder to find a house better than the one they own. Home improvements were huge in 2017 and 2018 and will still play a big role in the market, but not on as large of a scale.
It’s a Seller’s Market – But Not for Million Dollar Homes
We will continue to see a strong seller’s market for 2019, especially in the market of homes under $400K. In the $1M and above market, however, buyers reign supreme. The luxury market is soft, meaning homes are on the market for longer, and buyers have a significantly higher amount of choice.
Prices Will Remain Flat
As we move into 2019, we may see some pricing pressure on the luxury market but home pricing overall will remain flat or slightly decrease due to supply and demand issues. Entry level housing will continue to increase in value but at a more modest rate.
Mark Spain’s Advice to Buyers
Depending on your price point, when you find a high-quality home in the area where you want to live, understand the demand is going to be high. Make an offer! It is extremely important to have an experienced agent on your side. Make sure you are represented by a professional and have a reputable loan officer. Keep your offer clean and don’t ask for too much – otherwise, the seller may go with another offer. If you want the home, act fast!
Mark Spain’s Advice to Sellers
Don’t be greedy. The market is softening. The balance of power still remains in your hands as a seller but don’t take advantage of it. The first offer on a home is often the best offer. Make sure you are represented by a professional, full-time agent with years of closing experience under their belt.
Thinking about moving? Navigating the market can be difficult, and you do not want to do it alone. Contact us today to get a head start!