Looking to Buy? Ready to Sell? Read These TOP 10 REAL ESTATE Predictions for 2018
By: Lynne Anderson - Realtor, ABR Sea Pines Real Estate at the Beach Club
Happy 2018! Out with the old and in with the new is the mantra as a brand new year kicks everyone into high gear. Home searches and real estate activity will also catch fire, according to Trulia, so here’s a tip: Prices for all categories of homes drop to their lowest list prices of the year during January. While that may be great news for Buyers, if you’re looking, act fast - this is only a month-long phenomenon.
As you pack up the stockings, sweep up the confetti and search online for the perfect place at the beach, peruse these TOP TEN REAL ESTATE PREDICTIONS & TRENDS for 2018 to know what to expect.
Inventory shortages will continue to drive the market in the first half of 2018. According to analysts at Zillow, in most markets “inventory of homes for sale has become so tight that housing is now a game of musical chairs.” There are 12 percent fewer homes to choose from nationwide than there were a year ago.
Low inventory in turn favors a Sellers market. Homes may sell faster than they did in 2017, and at higher prices. For the 12-month period spanning December 2016 through November 2017, pending sales in Hilton Head were up 12.6 percent overall.
Remodeling will boom. Concerned about a limited market if they sell, many homeowners may choose to remodel instead of moving, which in turn, worsens the inventory challenge.
Mortgage rates will climb. Data suggests a standard 30-year loan is predicted to hit 4.3% and higher.
Home prices will continue to go up, but at a slower pace than 2017, according to analysts at at Realtor.com. Nationwide, prices are expected to climb 4.1% in 2018, while normal annual appreciation is closer to 3%. But on Hilton Head, an island with highly desired and limited inventory, the price range with the largest gain in sales was the $375,001 to $650,000 range, where they increased a whopping 22% from the year prior.
The home market in the South is hot hot hot, and will continue its solid growth curve. Southern markets could see 6% growth due to strong economic growth, an inviting attitude toward builders and a comparatively low cost of real estate and living in general. And, the Southern coastal areas are even hotter.
Bigger is not better anymore. McMansions are out and more modest homes are in. Retiring couples don’t want the overhead and extra work and new millennial and first-time homeowners can’t afford it.
Build it and they will come. Bullish construction will bring new homes to the market, i.e., have you seen the Bluffton corridor lately? Adding inventory may lighten the tight inventory crisis but it will take a few months to play catch up.
The super tight home inventory market will ease up during the second half of 2018. Due to new construction, and Sellers wanting a piece of the action, Buyers should see more properties to choose from, but it won’t be until late in the year.
10. Can you say tax reform and no more interest deductions? As it’s presently written, the tax reform bill could take a toll on the national market due to a significant reduction in home tax deductions. As we go to press, this federal tax reform bill is in play. While this is not good news for the national market, it is primarily high tax areas that could be significantly impacted. South Carolina has relatively modest taxes and experts believe living or retiring near the beach will prevail, and the race to the coast will continue.