2018 Housing Forecast
Positives:
Low existing inventory
Low interest rates
Employment is low
Impending tax cuts will put $$ into pockets
12% less inventory than a year ago per Zillow
6.9% annual home price increase in 2017 for Wi, 5.91% for North Central US, 4% predicted in 2018
Stats:
- From ‘16 to ‘17 listings down 2%, Closed sales up 1.1% Med. Sales price up 6% roughly 4 months of inventory in our region
- Nov sales up 4.2% from last year
- Waukesha co. permits down from last year per MTD data
- Buyers should buy soon, inflation is expected as well as rising interest rates. It could cost homeowners up to 20% more in a year
Negatives:
Labor shortages and driving construction labor up
Tight inventory means agents are writing several offers before getting acceptance
Now selling more new homes than the lots we are creating
Still too much regulation $84671 per new home (trend line is going down slowly)
Here’s 8 Reasons Why People Are Still Eager to Buy Real Estate:
- home prices are appreciating and it’s a safe investment over the long term
- millennials need a home to raise their families
- rents are high giving property owners excellent ROI on rental properties
- flips of older properties continue to create amazing returns
- real property is less risky (unless you get over leveraged)
- the economy is steady or improving (although Trump’s letting his enemies cause too much friction)
- foreigners including Canadians are eager to own US property
- bankrupt buyers are over their 7 year prohibition from the last recession and they can buy again.
Here’s a short list of positive factors that will affect the US Housing Market 2017 and beyond:
- moderately rising mortgage rates
- president Trump’s new tax plan
- low risk of a housing bubble / crash for most cities
- millennials buyers coming into the main home buying years
- a trend to government deregulation
- labor shortages pushing up costs of production and incomes
- the economy will keep going – longest positive business cycle in history
Dow 16 19762 4889 increase in 2017
Waukesha Co: 350K-1M
2016 1895 sales, 109 DOM ave. 3.85% off sale price, $426,592 ave. sale price
2017 2076 sales, 93 DOM ave. 3.83% off sale price, $441,238 ave. sale price
2016 200K-400K 2069 sales 73 DOM 4.28% off sale price 303,324 ave sale price
2017 200K-400K 1841 sales 53 DOM 47% off sale price 309,660 ave sale price
2018 Home Trends