Most Pundits Think A Slow Down in 2019-2020 is Guaranteed
Economists think that the housing market will see a drop off in performance in 2019-2020. Below is a list of factors that they consider when making their predictions.
12 Housing Crash Factors
Listed by Real Property Management of Tulsa
Many of the factors on the list are in a state of flux and are impacted by political uncertainty and global pressures. While a 2007 style decline might not be in the cards, most opine that the market will be flat to slightly negative over the next two years.
- Excessively high home prices via a price bubble
- Increasing underwater mortgages
- Fast rising interest mortgage rates
- Slowing economy and sudden rises in unemployment
- Wage growth not keeping up with home prices
- Tax changes and geo-political shifts
- Trade deal disturbance
- A stock market bubble and volatility
- High level of consumer debt affecting debt servicing
- Cost of living rises
- Risky low rate mortgages for new home buyers
- High oil and energy prices
At the local level, the number of homes sold has declined while the average sales price shows an increase year over year. LINK HERE to Greater Louisville Association of Realtors October statistics.
Higher end home sellers ($500,000.00 and up) are taking note of the slow down that has been persistent in their price bracket over the last few months. LINK HERE to CNBC article on the rationale of buyers and market conditions that impact their decisions.
Good news! The rental market is strong and is expected to remain strong through 2020. With interest rates and the cost of housing on the rise, some buyers are holding off on a purchase for the near future. More renters = higher demand = increasing rent rates = stable return on investment for rental property. LINK HERE to article on top 80 cities for investment property returns LOUISVILLE IS RANKED #38 of the 80 cities (over 250K in population).
Please note some unknowns surrounding the AirBnB market due to increasing regulations by the city and neighborhoods. LINK HERE
to WDRB story.
What does this mean for you here in Louisville, KY and what should you do?
1. Consider life shifts that are in store for you over the next 3-5 years.
- Will you need to downsize, upsize, age in place, or move out of town?
- Do you want to diversify your investments - invest in property for steady ROI?
2. Consider how your real estate holdings play into these plans.
- Is it time to transition to a larger home (slight buyer's market)?
- Is it time to free up cash to invest in rental property (rent rates/occupancy strong)?
- Sell now in the known market (unclear economic future-work within the climate at hand)?
3. Call us for solid data on Louisville's market to round out your knowledge.
- We help with pre-planning (to-do lists, timing strategies, positioning for the market and more)
- We provide rental ROI sheets, ins/outs of investing in rentals, help secure financing.
- We offer property management or offer best practices should you choose to self manage.
There are home owners who need to sell and buyers who want to purchase in all economic conditions. By working with our clients as a team, we are able to leverage our knowledge of the market, years of experience, and sensitivity to buyer/seller mindsets to create successful real estate transactions. This philosophy and approach is more important than ever in a changing market. We look forward to being a resource to you in the near future!
National Association Of Realtors 2019 Outlook
California Board Of Realtors 2019 Outlook