According to experts at Bloomberg, buyers can expect pricing discounts in 2019 and sellers can anticipate pricing disappointments.
According to the UBS Group Report of 2019, every market indicator points to things getting worse for sellers. London, Hong Kong, Munich, Toronto, Vancouver are all at risk of property bubbles and the subsequent consequences of deflation. In the US, “if you look at the data, it’s crystal clear, says Jon Woloshin, head of real estate for UBS Global Wealth Management’s chief investment office. “There is a clear slowdown in the housing market.”
Foreign buyers, particularly the Chinese, have pulled back from the market because of the strong dollar and because rising mortgage interest rates have made domestic homeownership much less attractive.” This all translates into more supply.
Jonathan Miller, president of appraiser Miller Samuels, believes that the greatest threat to a seller’s home price is excessive supply. “What was different in 2018 and will be even more marked in 2019 is that there will be more product coming onto the market…product that was held back in 2016 when the market started to soften. And every year that cumulative inventory keeps rising.”
The inventory issue crosses all market segments from top tier to most affordable. Again Miller. “The national statistics pivoted about six months ago, when we started to go negative. Not a sharp correction or anything but inventory rising. And what happens (when inventory rises? Prices slide or at least slow their rate of growth.”
For buyers, the real estate tale of 2019 is a positive relief from markets of 2015 to the first half of 2018. For sellers, the real estate tale of 2019 is an abrupt end to bidding wars and aspirational pricing that became reality.
Woloshin of UBS said, “Probably, 2019will be more favorable to buyers.”
Miller of Miller Samuels said, “And some people don’t know it yet. Those people are the sellers.”