By Janet Besheer
Last year was another record year in real estate throughout the entire Capital Region. The total homes sold in 2017 outpaced the record total in 2016, in spite of a 22 percent drop in inventory.
Home prices rose 3-4 percent over last year. So, what does that mean for 2018?
Equitas Realty is focused on five major real estate trends to watch in 2018: (1) mortgage interest rates; (2) inventory decline; (3) affordability; (4) millennials; (5) Freddie Mac and Fannie Mae reform.
Interest rates have stayed at historically low rates for several years now; the current average is 3.9 percent. The big question is how fast and how far will they rise in 2018?
Most economists agree that we will see an uptick in rates throughout the year. This is due to stronger economic growth, inflationary pressure and monetary policy “normalization.” On average, we are expecting several increases in the coming year and interest rates to rise modestly up to 4.4 to 5 percent. Now is still a great time to buy/sell real estate.
A shortage of homes to sell has been a thorn in our market throughout the past few years. We do not see that changing in 2018. The irony is we have a large buyer population looking in our area and even with low inventory, we foresee the number of homes sold to increase in the new year for many reasons ranging from relocation to upsizing and downsizing. Now is still a great time to buy/sell real estate.
Tax reform, wage growth and mortgage rates could result in wild fluctuations in affordability in the first half of the year. According to Lawrence Yun, chief economist of the National Association of Realtors, “Finally, in 2018, the growth in home prices and income could align. So slowly the affordability conditions will improve with regards to price and income. But rising mortgage rates will quickly cut into affordability in the upcoming years.” Now is still a great time to buy/sell real estate.
Millennials continue to stimulate central-city booms which contain elements of higher-density, amenity rich neighborhoods. This could also add to revitalization efforts in areas adjacent to downtowns. This bodes well for cities like Glens Falls and Saratoga Springs. At a recent panel discussion at the Queensbury Hotel, multiple Glens Falls business leaders agreed that there is a market for town home and condo construction in the city.
And there is momentum in Glens Falls for added retail and apartments. The “renaissance” continues in the north country. Now is still a great time to buy/sell real estate.
The effort to overhaul Freddie Mac and Fannie Mae is likely to begin in 2018. It is very important that all of us stay informed and understand the many ramifications of change for clients.
Things are still looking very good in our area and 2018 should prove to be a banner year up and down the Northway. Local businesses are expanding, new employment opportunities abound, and the housing market is strong.
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