We’re about to put a wrap on 2017 and it is time to look ahead to what the housing market forecast for 2018 is going to look like. If you’re considering buying or selling your home, or if you’re actively in the market, there’s a good chance you’re keeping up with the latest trends. If not, you ought to be.
Cliffco Helps Clients Understand Their Options
At Cliffco Mortgage Bankers we want our clients to know everything they can about what’s going on in real estate. We help our customers understand their options for obtaining financing for a property purchase. While nobody knows for certain how 2018 will turn out in the real estate market, and circumstances can and will change we’d like to take a look at what buyers, sellers, brokers and analysts are keeping their eyes on for the new year so you can better understand where the market may be heading.
Here Come the Millennials
One trend that U.S. real estate experts are going to keep a close eye on is how millennials are going to affect the housing market. The much talked about generation has reached the age where many are starting to become first time homebuyers. According to realtor.com, millennials could make up 43% of home buyers taking out a mortgage by the end of 2018. But what kind of market are they looking at?
Zillow Chief Economist Svenja Gudell tells the website Inman News, “We’re on the other side of the housing recovery, and the real estate market looks quite different than it did 15 or even five years ago,” Gudell said in a statement. “We have a huge generation entering the market. They really want to be homeowners, and they’re faced with an inventory crisis that leaves them with few options.” She goes on to say that we’ll see a rise in new construction “at the more affordable end.” Gudell also says affordability issues will drive more millennials to the suburbs despite a preference to live in more expensive urban areas.
Housing Supply and Demand
Danielle Hale, the chief economist for realtor.com says that she believes the housing shortage will ease. “The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall,” she told realtor.com. “Once we start to see inventory turn around, there is plenty of demand in the market,” she says.
But economist Bill Conerly, writing for Forbes has a different view. He says demand is driven by population growth, which he calls “soft.” Conerly also sites changes in household size and pent-up demand as factors that drive demand. Despite the stereotype of millennials living in their parents’ basement, household size is dropping, according to Conerly. He also believes that the vacancy rates for property have dropped to normal levels since the recession, so Conerly also feels there isn’t a pent-up demand out there. For these reasons he doesn’t see new demand on the horizon.
Cliffco Will Help You Navigate Home Financing
As you can see, different analysts look a t the real estate market and come to different conclusions. Conditions change that affect the market throughout the year and you need to stay on top of all of it if you’re involved in a property transaction. Cliffco can help you understand your home financing options. Contact us today.