The decades of association with a particular business makes us one of the experts in the field who has an idea about the impact of a particular variable on a particular aspect of the industry. With such deep and firsthand experience, we are sharing our understanding about the real estate in the year 2019. One thing that you will have to agree with us before we proceed further is that there is no crystal ball in the real estate business. You can’t expect everything that we mention here as the future prophecy that will definitely happen. Rather we are just sharing our opinion with the expert knowledge and insights into the industry to provide you with a rough outlook about what to expect in this industry this year.
By reading this article, you’ll get some of the ideas about the possible opportunities and risks involved in the industry this year. This analysis is not dependent on only the understanding of the real sector rather the statistics depicting the historical trends in this sector. But these statistics combined with the knowledge about the impacting factors have helped in the generation of this article. Here we are going to provide you with the discussion and analysis of certain factors, which can really have a role in the real estate market.
1. Interest Rates
The rising interest rates impact the rate of mortgage too. As most of the house owners use the mortgage as a medium to buy the home, the increase of mortgage rate increases their monthly expenses. Even a small increase in the interest rate is going to impact the mortgage rate directly, resulting in higher expenses to be paid for owning a house. With the increase in the mortgage rate, some of the individuals who might have about a house otherwise would not even qualify for purchasing a home. Along with it, the spending and saving proportionality might get disturbed, and the individuals or households might not go for new houses.
All of these factors result in the “seller market” nature of the real estate market to the buyer market or at least the neutral one. With this change, you must expect the adjustment of the prices. So, if you are a buyer, then you must be knowledgeable of this situation as it can be advantageous for you.
Now with all this explanation, what do you expect 2019 to be in terms of real estate? Although, no one knows the future, but still it can be estimated that small increase in the interest rates can be seen, which will impact the mortgage rates and thus price adjustments because of the reduced demand of households. As a buyer, you must wait till this situation before you buy a house in 2019.
2. Trust On The Market
Although, you would have heard this phenomenon mostly in the stock exchange dealing but the real estate is also impacted as a result of the trust factor. A higher level of confidence in the market results in an improved outlook. However, the current situation of US, considering the government shutdown, the outlook of the market is not confident anymore, and a decline can be seen. Some of the factors that can have an impact on the confidence level of the real estate buyers and sellers are the economic situation of the country, the political situation if the country, world dangers involved. The partial government shutdown along with the other factors that we have mentioned, you can expect a mixed impact on the real estate sector.
3. Competition In The Industry
From the last few years, the real estate market of US has been seller’s market where most of the houses up for sales had been sold quickly and on a higher price. But from the fourth quarter of 2018, a decrease in this trend has been witnessed, and the market has moved towards normalcy where the buyers and sellers are sharing an equal ground. Now in 2019, the number of houses to be sold is expected to face an increase thus converting the existing market to the buyer’s market.
4. Price Level
Over the years, the increase in the price level of the housing sector has been too rapid. However, the predictions have been in famous of the slight changes in the price level. But that has not remained the case. The predictions this year are still for the slight increase in the price, but the price level for the real estate industry is impacted by a number of factors, so you’ll have to put a close eye on all these factors to know what actually happens this year.
5. Inflation Rate
The rate of inflation has a direct impact on housing rates too. If the level of inflation this year will be higher, then you can expect a higher increase in the price level. Similarly, a low or moderate inflation level will result in a low or moderate increase in the price level. For the year 2019, the United State’s real estate market is expecting a moderate increase in the price level.
These are some of the important factors and their expectation for the real estate market in the year 2019. Make sure to keep in mind that these are just the estimates, and you’ll have to perform the rest of the analysis regarding the real estate, keeping all these factors under consideration.