As 2018 winds to a close I took a break to enjoy some wonderful Hawaii sunshine! I hope you’re also finding times to rest and relax in what is often a crazy-busy time of the year.
Even though I’m on the beach, that doesn’t mean I’m not thinking about real estate! In fact, I’ve spent some of my down time analyzing the past year and looking forward to 2019.
I want to share those insights with you because I know you have questions about whether 2019 is the “right” time to buy or sell your home.
First, the “right” time is different for everyone. Yes, market conditions will impact your opportunities. But many other factors – your age, your employment, changes in your family – will have a bearing on whether you make a move in 2019.
In 2018 we saw the most frenzied market I’ve been in since I started in this industry. In much of Puget Sound, including the Covington, Maple Valley, and Renton markets my team and I serve, that was definitely the case for much of the year. By third quarter, we definitely saw a slowing of the market. Part of this is seasonal, and part of it may have been due to increases in interest rates and concerns about mid-term elections.
So what’s ahead for 2019? Here are my thoughts:
- We probably won’t see “premium” pricing. For some of 2018 sellers could ask virtually anything for their home – and get it! I don’t think that’s in the cards for 2019.
- Fewer multiple offers. Real estate is all about supply and demand. Right now, supply outweighs demand. Only homes priced slightly below market value will likely see multiple offers and bidding wars.
- The backlog of buyers should start entering the market, although they may not do so in a big wave but rather a bit at a time. Buyers who were unwilling to participate in bidding wars stepped out of the market. They still want to buy, and they’ll start the home search process again.
- Millennials will play a big role in the market. Research shows that 52% of millennials want to buy in the next two years. However, many of them have crippling debt from student loans, which will impact their ability to afford the home they want.
- We’ll see some price appreciation. This will likely be in the non-luxury segments of the market and will probably occur in the first six months of the year (historically, our “busy” market in the Puget Sound area). Appreciation will likely flatten in the last half of the year.
- The luxury market will see some gains. Homes priced up to $1.5 million should have strong sales, and homes up to $3 million will see slower (but still healthy) sales. Homes priced above that $3 million range will see much slower sales. Generally speaking, market times will increase in the luxury segment.
- The employment outlook will be good in our area because of anticipated job growth. That’s always a good thing for our housing market!
- Interest rates will continue to climb. Right now, estimates are that rates will be at 5.5% by fall. This isn’t a huge increase from today’s rates, but when you remember that every 1% increase in interest rates means 10% less buying power, and you can see that too much upward movement in rates can slow the real estate market.
If I have one message for both buyers and sellers for 2019 it would be this: preparation is critical.
For buyers, that means consulting with a great agent to go over your goals, getting preapproved by a solid lender, and creating a plan of action for your home search and purchase. While looking at homes can be a fun and exhilarating experience, there’s a lot more that goes into getting you into your new home. Preparation on the front end will save you a lot of aggravation!
Sellers will want to plan their potential sales early, allowing enough time to find an excellent listing agent who brings years of experience, great negotiation skills, and a top-notch marketing plan to the table. They’ll also need guidance from their agents about updates and projects that could put money in their pockets when it’s time to sell – and where not to waste their time, energy, and money.
Our team is looking forward to 2019. And because we practice what we preach, we’re prepared too – to serve our clients as we always do, with expertise and integrity.
How can we best serve you in 2019?