2018 Real Estate Market

No one has a crystal ball, but as a real estate agent, you need to be in a position to look as far ahead as possible. You can help your homebuyers and sellers, and impress your prospects, with a good understanding of the factors in play in the 2018 real estate market. Here are some predictions that are worth tracking.

Home Inventory

In 2017, lack of inventory was a problem in many markets, especially in the starter home price ranges. Experts are predicting that inventory should increase slowly during 2018, but that supply will still fall short of demand.

What to watch for.

Your sellers probably love being in a seller’s market, but they need to understand that if they want top dollar, they still need to do things like make repairs before putting their home on the market. If they don’t believe you, you can reinforce your advice based on feedback from real estate showings.

If you work with first-time homebuyers, you may end up advising them to lower their expectations to get into a home they can afford now. Another alternative is to save more down payment money to afford the homes that are available, but are priced a bit above their original target range.

2018 real estate marketWill There Be a Housing Bubble in the 2018 Real Estate Market?

Some people are afraid of another housing bubble hitting in the 2018 real estate market. The market was hot in 2017, but many experts aren’t seeing signs of another bubble forming. Redfin doesn’t predict a housing bubble based on their analysis.

Other experts expect home prices to rise slowly in 2018, but look to the Case-Shiller index, which they believe doesn’t indicate that a bubble is on its way. Again, predictions have been wrong, but this is the best one we have at this time.

What to watch for.

Keep an eye on the predictions throughout 2018 to spot a change in the analysis. Right now, use the expert’s analyses to make your buyers and sellers more comfortable.

Availability of Credit

After the crash in 2008, mortgage lenders quickly cracked down on credit availability. Those restrictions are still prevalent today. The good news is that they contribute to avoiding a bubble in 2018. The bad news is that some prospective homebuyers can’t get credit. In fact, in the past six years, Fannie Mae and Freddie Mac awarded 60 percent of their home loans to borrowers with FICO scores at 750 or above.

What to watch for.

Some experts predict that credit restrictions will see a small reduction in 2018, so watch the mortgage market for those types of signs. In the meantime, make sure to counsel your buyers to make sure their credit is stellar before applying for a mortgage. And, don’t forget to mention that they shouldn’t make any large purchases on credit until their loan is closed!

The Interest Rates

The stock market correction in early February, 2018 caused a bit of panic. However, many experts in the financial industry aren’t concerned, because that represents a normal cycle. The possibility that the economy heating up may contribute to an increases in inflation is on some people’s watch list. If that happens, the Fed may respond with more interest rate hikes. As of this writing, the Fed plans three increases in 2018, but that number could increase depending on what happens as the year progresses.

What to watch for.

Keep an eye on inflation numbers and the Fed’s reaction. Right now, it may be wise to encourage buyers to buy sooner rather than later in 2018. There is currently no disagreement among the experts on the certainty of interest rate increases during the year.

Lead the Way with 2018 Real Estate Market Knowledge

A few Google searches throughout the year will help you stay current with the trends in the real estate market. Use that knowledge to reinforce your brand as the real estate expert.

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