2019: Best Year For Real Estate?
2018 we saw some crazy ups and downs with the market, one of the largest stock market declines in recent years, some of the lowest and highest mortgage rates in the recent years, and it’s all due to the Federal Reserves actions. The Federal Reserve indicates that we will see two rate hikes in 2019. With 4 raises last year we can expect less turmoil and more consistency this year (depending on economic numbers) .
What this Means for Buyers and Sellers
Steadier Market
It’s hard to say, but likely refinances and purchases are going to be big in 2019. With a steadier market we may see a more average flow in the market because we don’t have the “shock factor” of rates going up or down so often. Hopefully this will create a more consistent business for buyers and sellers and less urgency.
Housing Prices May be More Consistent
If we don’t have the federal reserve teasing us with impending doom all the time, real estate prices will likely stay more consistent and we won’t see such an inflated market. When prices stay consistent so don’t mortgage rates, which will be beneficial to buyers and sellers.
Refinances Will Come Back
Refinances were put on the back burner because purchase business was so hectic. A level market will give lenders time to assess and execute refinances. Also if rates are not expected to increase or decrease so dramatically, it will give homeowners more time to make a good decision.
Real Estate Inventory May Increase
With a consistent market comes consumer confidence. If there are less up turns (and down turns) in the market it will allow more sellers to list their homes, thus increasing the inventory and creating a surplus of houses. When there are a surplus of houses we see cost remain more static; which also provides a favorable buyers market. Although we may see less appreciation in the market, we may see a more consistent steady appreciation that we can rely on.
A Steady, Consistent Increase is Good for the Economy
When consumer confidence is up and people are spending money, it makes for a proactive and stable economy. Our financial system works best when we have the majority of people comfortable. If we see less volatility in the market we should see more confidence, and thus more growth.
Conclusion
Economics is part theory, part science. The problem is the formula is always changing; factoring in politics, foreign events and government regulation all play a part in how people perceive the market. The bottom line is people spend more money when they’re comfortable, and a more consistent financial standing in 2019 is likely to bring that about. However, it is all theory.
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