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The real estate market is an ever-evolving environment that can shift abruptly depending on a number of extenuating factors. While it is impossible to accurately predict what will happen to housing prices or mortgage rates in the long term, the Urban Land Institute recently release its 2019 Emerging Trends in Real Estate report that looks at 2018 market activity and speculates what kind of trends industry professionals will likely see in the coming year.
Market cool off
2018 has been a peak year for the housing market and while many have speculated that a collapse is around the corner, it doesn’t look to be that way. Mortgage companies are lending at a steady pace, buyer demand is still high, and home prices are strong. The coming year is predicted to be more of a plateau to fall in line with the expected general slowing of the overall US economic growth.
Affordable homes in high demand
Continuing the trend of 2018, lower priced housing will be urgently needed. New construction has slowed drastically and more so on the affordable side of the housing spectrum than any other. Starter homes will surge in popularity and more rental housing will be built to help bridge the housing gap.
Millennial suburban migration
Millennials will continue to be the largest segment of new home buyers next year and their interest in the suburbs will have a large impact on those cities economically. Younger buyers are looking for larger homes, green space, and good schools that the larger cities are unable to provide at an affordable price. These “18-hour cities” will also bring in more retail and commercial developments to meet the needs of the influx of millennial homebuyers.
Mixed-use space is king
Retail spaces are moving toward less new construction for stand-alone stores and shorter leases for existing structures, making it a more competitive market for businesses. Larger retailers, like Amazon, will steadily expand their physical presence around the US. Demand for live-work-play spaces are continuing to grow, especially considering the pricing of urban housing so multi-use spaces will thrive and potentially branch out into new offerings we haven’t seen before.
Climate change impacting pricing
With an uptick in floods, violent storms, and wild fires in 2018, the property values in many areas of the US has shifted. In addition, the influx in home owner’s insurance payouts will lead to increased future costs. To combat these potential natural disasters, a growing demand for weather resilient homes will increase in those areas most heavily impacted by the changing weather.
When it comes to those looking to buy or sell in 2019, the outlook is good. Experts predict that property prices will be strong but the balance will resume between buyer and sellers rather than leaning heavily towards sellers as in 2018. As for real estate agents, the outlook for 2019 looks to be a year of change. Those that will prosper will be the professionals that are able to adapt to the evolving market.