If you’re looking for some expert 2018 housing market predictions that can arm you with buyer/seller talking points for the year ahead, you’ve come to the right place!
We’ve gathered real estate forecasts from 10 highly knowledgeable industry members — each of whom has their own unique take on where the market might move over the next 12 months.
Let’s take a look:
Real Estate Forecast #1
“An overwhelming majority of renters want to own a home in the future and believe it is part of their American Dream. Assuming there are no changes to the tax code that hurt homeownership, the gradually expanding economy and continued job creation should set the stage for a more meaningful increase in home sales in 2018.”
It’s no secret many renters have struggled since the recession to make the transition to homeownership. Provided the economy continues to grow at a modest pace, this 2018 housing market prediction seems pretty on point.
Real Estate Forecast #2
“Millennials will move to the suburbs. Those more-accessible homes will come with a catch: They’ll likely be farther from urban job cores. Escalating land and construction costs – along with zoning laws – make it prohibitive for builders to add affordable housing in cities near jobs, so they will look to the suburbs. As a result, that’s where millennials and first-time home buyers will flock for the greater variety of homes at relatively lower prices.”
Several metros nationwide have become prohibitively expensive to live in. This is especially the case for younger generations, like Millennials, many of whom have struggled to build enough wealth to afford city living. So, it makes sense that many Gen Y-ers will pack their bags for more comfortable and affordable homes (until they start earning more, at least).
Real Estate Forecast #3
“The economic environment remains favorable for housing and mortgage markets. For several years, we have had moderate economic growth of about two percent a year, solid job gains and low mortgage interest rates. We forecast those conditions to persist into next year.”
“Inventory will be the major factor shaping the 2018 housing market, but that’s nothing new. For the third year in a row, the nationwide inventory shortage is likely to continue to hinder sales and increase prices. We expect small increases in inventory at the high-end of the market by year-end.”
As housing market predictions go, this one sounds spot on. Luxury construction continues in major metropolitan cities like New York, San Francisco, Washington, D.C., and Boston. Affordable housing, on the other hand, has yet to ramp up in these cities and countless others nationwide. Analysts think the latest tax legislation may hinder low-cost home-building, so Richardson’s outlook seems likely to occur.
Real Estate Forecast #5
“Overall, from a sizing of the market, we think it will be similar to this year. The size of the Sec. 8 and expiring tax credit market will be pretty much the same. [C]orporate tax reform … could have an impact on resyndication, mod-rehab, and new construction deals, but assuming what we know today, we think the size of that market will be pretty much the same.”
Unlike the stagnant home construction in the single-family detached market, multifamily housing starts have increased considerably in 2017, per data from the National Multifamily Housing Council. In fact, they appear to be on the rise for the foreseeable future.
Real Estate Forecast #6
“The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall. We expect the relief to start in the upper tiers, and it will make its way down to the lower tiers. Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes. It will get a bit worse before it gets better for buyers of starter and midprice homes.”
Rising home prices have been a trend in several big markets nationwide. A report from S&P CoreLogic Case-Shiller shows the 20 biggest markets in the U.S. experienced their highest home price levels since 2014. It seems likely that, with a limited supply of homes — at least through the first half of 2018 — these prices could continue to swell, per Hale’s prediction.
Real Estate Forecast #7
“The housing market has been hamstrung by insufficient supply, with inventories of homes remarkably low, given the home price growth we’ve experienced. The job market remains strong; demographic trends are quite favorable; mortgage credit is becoming more available to qualified borrowers; and home prices should continue to rise. All the pieces are in place for stronger growth in 2018 and beyond.”
See a trend here? Housing supply is a giant issue for the real estate industry — an issue that affects sellers’ ability to offload homes, buyers’ ability to afford the restricted inventory, and agents’ ability to close more deals that are worth their time and effort.
Real Estate Forecast #8
“The impacts from this season’s hurricanes on the U.S. economy were wide-ranging but should dissipate over time. We expect economic activity to rebound in coming months. The recovery will likely be slower for home sales and home building, however, as the labor shortage and rising material prices will likely worsen after the hurricanes, exacerbating already-tight inventory.”
You can’t forget just how much natural disasters have affected the real estate market and, in turn, these professionals’ housing market predictions. As we discussed in our 2017 real estate news roundup, Hurricanes Harvey, Maria, and Irma did a number on much of the southern U.S. and Puerto Rico, leaving their housing situations in bad shape. As Duncan notes, though, the recovery should aid these markets’ conditions.
Real Estate Forecast #9
“The economy and the housing market will grow like crazy. Job creation is at record levels; unemployment is at a 17-year low; wages are feeling upward pressure and companies are investing at a fast and furious pace. A backdrop of political uncertainty will not slow down the global economic thoroughbred that is galloping at a full run.”
The real estate news publication founder’s housing market predictions rely on improvements in employment and the economy at-large. The U.S. GDP grew at a roughly 3% rate toward the end of 2017. If that growth continues into 2018, there could indeed be blue skies ahead as Inman anticipates.
Real Estate Forecast #10
“Homeownership will continue its comeback story in 2018 as Gen Xers who were hard-hit during the Great Recession become homeowners again, and as more Millennials buy homes for the first time. But home buyers won’t be without challenges as they’ll still face low inventory, slow wage growth and expensive starter homes. For Millennials, they have the added hurdle of saving enough money to make a down payment and make competitive offers amid rising home prices.”
Industry pros mention Millennials’ struggles to afford homes for sale and forget many Gen Xers also remain on the sideline. Student loans and other debts persist as problems for both demographics. The 35-to-50 crowd, though, appears to be having an easier time getting home loans and purchasing properties, according to the National Association of REALTORS 2017 Home Buyer and Seller Generational Trends report.
Respectfully Re-Blogged from Placester by SHEILA LIERMANN