By Joe Sesso, Author and National Speaker for Homes.com
As we begin 2019, it’s important to take time to reflect on the best way to start your year. Planning at the beginning can give you a clear track to follow, setting you up for greater success. In order to plan your year, it can be helpful to look at what happened in 2018 to see where 2019 is heading.
While no one can be sure what will happen this year, there are some clues we can follow. Here are three trends to consider so you can go in to 2019 as strong as possible.
- Buying a home may be more difficult.
There are a few reasons why buying a home may be more challenging this year. Initially, mortgage rates that had been steadily climbing in 2018 are estimated to reach their peak this year at 5.8 percent. Coupled with this—because most homebuyers determine their affordability by the monthly payments—with the increase in mortgage rates, many will slip into a lower price point. As a result of these factors, and rapid increase of housing prices, it’s likely that overall home sales will decrease, but only slightly.
- Inventory will increase.
In the past couple years, inventory has not been able to keep up with the demand. This year, inventory is expected to increase, but only by about 7 percent. While this is not a huge increase, it is expected to help ease the deficit from past years. At the same time, since the increase is relatively small, it will still help sellers to stay on top. In addition to this, it’s largely expected that the increase will come from luxury homes that hit the market. Because of this, agents who have held off working with luxury homebuyers or sellers could take advantage of this change to test their skills.
- Millennials will continue to be the top buyers.
As we’ve seen in past years, millennials will continue to be the biggest buyers this year. However, since the majority of the millennial group is now approaching their 30s, many of these will not be first-time homebuyers. Instead, they’ll likely be looking to expand, as they search for middle- and upper-priced homes. At the same time, though, it’s expected that millennials will be the most price-conscientious group, as many still carry the burden of student debt. It’s predicted that they will sacrifice on location, amenities or space in order to save money.
What does this mean for you?
Since these trends will cause some shifts in the real estate world, it’s important to begin planning how to use this to your advantage. For example, while it’s expected that more luxury homes will hit the market this year, consider whether you should pursue these types of homebuyers. In addition to this, if you haven’t been working with millennials before, this could be the opportune time to jump in. On the other hand, if you have been working with millennials but only as first-time buyers, this is a good time to reframe your focus and think about them as repeat buyers.