2018 Housing Predictions & Trends To Watch For
Whatever real estate decisions you might be making in 2018 – buying or selling a St. Louis home, or finding a new rental or lease – there are some developments you’re going to want to be familiar with. With real estate, being informed is everything, and the following trends could have a significant impact on your financial future.
For St. Louis sellers, the market is going to be fairly easy, although it’s going to be important for home buyers to pay particular attention to timing. Meanwhile, renters will be able to take advantage of a surplus in supply to bargain for more amenities and purchasing power.
Home Sales & Purchase Predictions for 2018
Tight seller’s markets over the last several years means that many Americans are unsure about their abilities to purchase either a first time or new home. Industry wide studies do not see this trend improving by much, and roughly a quarter of Americans think the seller’s market will improve.
This pessimism has been around for a while, however, and is starting to dampen interest in new home purchases. Several other factors dragging home sales down are increasingly high rents which hinder first-time St. Louis home buyers from saving, and rising interest rates along with higher home prices are increasingly putting first-time home buyers at a disadvantage. Home sales are like any other economic transaction; when demand is down, typically there is a deflationary effect on prices.
Real estate experts know that while it’s difficult for people to save for a down payment, home ownership rates across the United States are continuing in a positive direction. The homeownership rate in the US is just over 60% and expected to continue rising, albeit slower than previous years.
This means that interested St. Louis buyers will have to stay vigilant, as tight market conditions means quality and affordable housing is going to move fast, and being slow may cost you the house of your dreams. Having financing in place will be essential as it likely that eligible homes will be getting multiple offers from interested buyers.
Most affordable housing will be in the suburbs and outlying neighborhoods surrounding major metropolitan cities and markets. A factor that is slowing home buying rates is the fact that millennials have been accumulating wealth at a much slower pace than previous generations. While the notion that millenials have “killed the housing market” is nonsense, it’s a fact that their purchasing power is less than that of previous generations for a number of complex factors.
Part of the confusion regarding millenial home buying intentions is the confusion as to whether lagging sales are because of reluctance to relocate into outer neighborhoods of major cities, or if a lack of confidence is behind slow purchase rates.
While home buying patterns among millenials are being deciphered, for sellers there is much more optimism. As home values continue to rise, the offering prices are increasing, and as such people are seeing greater returns on the investments they’ve made over the years with the purchasing of a home.
Rental Forecast for 2018
Renters are facing a significantly more optimistic outlook than their home buying and selling counterparts. Supply is finally catching to up demand, and rental capacity is beginning to offer relief in tight rental markets.
With options to choose from, there are even incentives being offered to renters in new construction units. Things like free rent or luxury amenities like gyms, spas, and pet areas are becoming increasingly more common for renters all over the United States.
To recap: the housing market is going to require St. Louis home buyers to remain vigilant, and the most important thing you can do is to be prepared to do your homework. Being prepared also includes lining up financing, making sure you’re exploring any and all options, and realizing that a tight buyer’s market means being prepared to lose a house or two along your journey.
For sellers, the outlook is fairly good with elevated home prices and demand rising; 2018 will be a good year to sell your home.
Finally, renters seem to have more options than ever, and while rents may continue to rise nationwide, there are now more options and choices.