2018’s housing market will be driven by increasing inventory, slower price appreciation, and tax reform (*wildcard). The increased inventory will suppress some of the price growth sellers have enjoyed for years now. Buyers will have more options to choose from in the market.
Pricing: +4.9% Growth vs +8.3% Last Year
Mortgage Rates: Avg 4.6% most of the year, ending up near 5.0% by end of year
Inventory: New construction to add much more inventory this year
“While inventory in the $300,000 plus market will grow due to an increase in new home construction, we expect inventory below $300,000 to remain tight unless builders are able to find more affordable lots for new home construction in lower price points,” says Becky Babcock, CEO/Owner of Path & Post.
Tax Reform: The current proposed changes could have mixed results on the housing market. “While the ultimate impact of tax reform will depend on the details of the plan that is finally adopted, both versions include provisions that are likely to decrease incentives for mobility and reduce ownership tax benefits,” realtor.com® reports. “On the flip side, some taxpayers, including renters, are likely to see tax cuts. While more disposable income for buyers is positive for housing, the loss of tax benefits for owners could lead to fewer sales and impact prices negatively over time with the largest impact on markets with higher prices and incomes.”
Houses are definitely selling, but peak appreciation may be in the rearview window. This may be your last year to cash out and move up or move on. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit down with your agent to see if it is priced appropriately to compete in today’s market. If you’re not on the market yet, list early in the year to beat the Spring rush. More buyers register and search online in February and March than any other time of year. So smart sellers will list sooner, rather than later, in 2018.
SEE: The Ultimate Guide to Selling Your Home
You will finally get more inventory to choose from this year. However, your buying power will be reduced by rising interest rates throughout the year, see chart below to understand how rates impact your buying power.
SEE: The Ultimate Guide to Buying a Home
Every Market is Local.
Woodstock is different than Canton is different than Marietta is different than Waleska, etc… Be sure to check your local market reports weekly if you are considering a move in 2018.
SEE: North Atlanta Market Reports