As we approach the end of the first quarter of 2019, we can begin to make some assumptions about real estate trends for 2019. We are currently entering a new “normal” real estate market. Normal may not be what some people would choose to call the market now, but this is mainly due to the fact that a normal market feels strange. It has been years since we have experienced a “normal” real estate market and people are no longer sure of what to expect.
The 2019 real estate trend is stabilization nationwide. Despite the fact that inventory levels are remaining lower than historical norms and buyers may be a little wary of purchasing, the market is continuing to normalize. Interest rate increases and economic uncertainty are the cause of most concerns, so if the Federal Reserve does not increase interest rates and the stock and job markets stabilize, then we will likely see a revitalization of the real estate market.
However, when we look at the real estate forecast over the next 5 years, we need to consider that we will likely experience some type of national economic recession. It is unknown if that recession will be short-lived or last a couple of years, but the impact of this real estate forecast on homeowners will be much different than the last great recession. In that recession, real estate and over-leveraged mortgages were the drivers of the collapse. In general, mortgages are much stronger now than they were previously and the market is operating within fundamental levels. Instead of real estate outpacing other markets, wage growth has been matching home price growth in most markets, including Las Vegas. This means that people are actually able to afford the homes that they are buying, and will not face the same types of losses that they experienced in the last recession.
To learn more about how national real estate market trends in 2019 affect Las Vegas, click here.
We can also assume that the real estate forecast over the next 5 years will call for an increase in inventory even greater than we are currently experiencing. People will always want and need a place to live and as urbanization continues, the rate that new living spaces and homes are being created does not match the demand in metropolitan areas. This will eventually lead to an increase in home prices and a more expensive real estate market. Due to this type of demand and change in the market, sellers may tend to hold onto their homes for the long run and will not sell or foreclose on their homes as we have seen in previous recessions.
Despite an economic recession and the effects that it may have on the real estate markets, the real estate forces for the next 5 years will remain strong and we can expect an even stronger market in 5 to 10 years.
Interested in how these real estate market trends may affect your home sale or purchase? Contact us and we can give you a free evaluation or answer any other questions you may have.