2018 Real Estate Market Forecast
Q: Gerald, what’s your 2018 forecast for the Real Estate Market? Cindy, Scotch Plains, NJ
A: Happy New Year to you, Cindy and to everyone in my real estate insider family!
Cindy, there is no “real estate market,” every local real estate market is unique and different. However, there are characteristics of my local market in North Jersey that you are seeing in many other places. One characteristic is low housing inventory–this is why home prices have been edging up so fast in so many places, because there simply isn’t enough available housing for sale to meet demand for a variety of reasons.
I see no significant increase in residential family construction this year so I expect inventory levels to remain tight which also means that prices in those areas with low inventory are likely to continue to continue to rise for the time being barring some cataclysmic event.
Mortgage defaults overall are a third of what they were in 2011, so there will probably be less short sales but more REOs in North Jersey as banks are feeling their oats and taking advantage of increased competition among buyers.
All the natural disasters we’ve endured in the US in 2017 mean that property insurance premiums are likely to rise this year—FEMA flood insurance rates for example are increasing at 18% a year!
Mortgage rates are likely to continue to edge up in 2018 which will be some downward pressure on home prices, but I think that will be tempered by demand which I think will remain strong.
Thanks for your question, Cindy. For more real estate information and tips visit my blog at geraldlucas.com.