The year 2018 was one of ebbing expectations. Early in the year the local market was still rather robust with limited inventory and relatively strong demand from buyers. Sellers were still seeing multiple offers – though fewer than last year – and selling prices often exceeded asking prices. This is the model both buyers and sellers had come to expect, the new normal that began in earnest in 2013-2014 as we recovered from the Great Recession.
Then summer arrived. You could almost smell it in the air – buyers had had enough of escalating prices, multiple offers, trying and trying to get a house only to find something that was less than they wanted for more money than they wanted to spend.
Late summer and early fall are typically busier than the summer, but in 2018, the expectations had shifted: Buyers were becoming pickier about properties; inventories were climbing a bit; there were fewer multiple offers; and I saw more price reductions. Houses are now selling in three-plus weeks rather than one or two. The buyers are driving this shift – it hasn’t quite sunk in for sellers yet that the market has changed a bit. Seller expectations have not yet caught up with the reality of current buyer expectations.
Predictions for 2019
So, what to expect in 2019?
Not to worry – the sky is not falling (unless there is some major external economic calamity such as a trade war, recession, stock market crash, etc.).
Based on continued lower supply of houses available for sale and continued demand from buyers as the local economy continues to grow, I expect that prices will stabilize and not rise or fall dramatically. The volume of sales will probably be less than in 2018. Interest rates are a bit of an unknown, but, barring a recession, I anticipate that they will remain steady or rise slightly.
Buyers have become more selective in their housing choices; they’re not willing to buy just any overpriced lean-to. They will pass on houses that are not well prepared, attractively staged, are overpriced or have some other deficiency (think: busy street, in need of lots of upgrades, etc.). Houses of this ilk will tend to sell more quickly only because of their lower pricing.
Just a quick note on affordable hous- ing: At some point, our housing supply problem will become a housing demand problem. In other words, to keep our economy vibrant, we need to have houses that are affordable for middle-income earners; the current supply is woefully inadequate.
If you have questions about where the market is headed, feel free to reach out to me directly.