Market Predictions for 2018, 2019, 2020

There are always reasons to buy or not to buy real estate. Let’s look at the reasons to buy and not and then look at some market predictions that may help you and your clients make solid buying (and selling) decisions.

Eight Reasons to Buy   (Thank you Market Watch)

1. It’s a relatively “safe” investment over the long term because home prices usually appreciate over time.
2. Millennials need a place to raise their families.
3. Rents are high…SFR owners get a return on investment.
4. Flipping older properties continues to create strong returns.
5. Real property is less risky than other investments…unless you get over leveraged.
6. The economy appears steady.
7. Foreigners, particularly Canadians and Chinese, are eager to own US properties.
8. Bankrupt buyers from the financial crisis are now over their 7 year required wait time to get into the market again.

Eight Reasons Not To Buy  (Thank you Market Watch)

1. There’s more to the story besides the inspection report.
2. There could be hidden damage, such as rotten studs behind just-removed walls, found only in renovations of as-is properties.
3. Murphy’s Law applies to real estate just as it applies to everything else. “Anything that can go wrong will go wrong.”
4. Patch repairs don’t work or last forever.
5. No warranties or information about houses coming out of foreclosure. Even new construction warranties may not apply.
6. More liquidity and diversification in stocks than in real estate investments unless you can own lots of properties in lots of locations.
7. Even if you’re not a DIYer, there’s less work involved with stocks.
8. There are fewer fees and taxes involved with stocks.

Here are a few predictions about the housing market from experts.

1. Freddie Mac predicts a “good” 2018 with a solid +5% price growth.
2. The National Association of REALTORS® predicts flat sales in 2018, according to NAR’s vice president of research, Paul Bishop.
3. CoreLogic expects 2018 prices to grow 4.3% by the end of 2018 plus
   3. Home appreciation – +3.2%
   4. Mortgage interest rate – average 4.6% now increasing to 5% at end of 2018
   5. Existing home sales – +2.5% due to low inventory easing
   6. Housing starts – +3% in home building; +7% in houses
   7. New home sales – +11%
   8. Homeownership rate – stabilizing at 63.9
4. With cost of living rising, workers and businesses in San Francisco, San Jose, Seattle and Miami may migrate to cheaper cities such as Philadelphia, Houston and San Antonio.