2019 Real Estate Forecast
Q: What can we expect in real estate in 2019, Gerald? Clarissa, Warren, NJ
A: It’s important to remember that every local real estate market is different and driven by many factors, the most important of which is supply and demand.
Many local real estate markets around the country have been cooling down recently after record price gains due primarily to lack of housing inventory. This lack of inventory has been artificially inflating prices as demand far exceeds supply. High end luxury home demand in my local real estate market in New Jersey has seen some cooling recently as some buyers have pulled back in reaction to the new tax law that limits state and local tax deductions, but on average most of the local markets in Jersey have not reached price highs experienced at the height of the last real estate market bubble in the mid 2000s which means there is still room for price growth.
There are however many local real estate markets around the US that are currently experiencing all-time price highs which is potentially concerning if you are operating in those markets. The biggest driver of real estate prices are jobs, income and the economy and obviously a recession is going to come sooner or later.
I can’t predict the future but I am confident that real estate market cycles will continue to ebb and flow like they have for hundreds of years. There are 4 stages in the real estate cycle: recovery, expansion, hyper supply and recession. Most local real estate markets are still in the expansion phase but that can and ultimately will change, so it’s vital that you monitor the local economy, jobs and most importantly, housing inventory levels so you aren’t caught flat footed when an inevitable change happens.
Thanks for your question, Clarissa. For more real estate information and tips visit my blog at geraldlucas.com.