2018 Real Estate Trends and Forecasts
The real estate market had a great year in 2017 with increases in sales and prices. Worries that such trends were reflective of another bubble have seemingly been assuaged as evidence points toward a genuinely healthy real estate market. If you’re looking to buy or sell in 2018, indications from 2017 and predictions for 2018 will impact how you take action.
Real Estate Market Trends for 2018
First, let’s look at the market itself. Inventory shortages in 2017 have signaled to developers that it is time to start building new properties. The millennials are expected to be a huge influencer in terms of the kinds of homes being developed. We expect to see new properties being established for first-time home buyers. The nature of this growth (i.e., building for first-time home buyers) is consistent with what transpired in 2006 right before the housing market bubble burst, which is why some are anxious about a subsequent burst; however, with experience comes wisdom. Developers, realtors, buyers, and sellers are using more sense.
Speaking of the bubble burst, forecasters claim that the value of homes in the U.S. could exceed the peak value they achieved in April 2017 by the third quarter of 2018. I recommend taking this with a grain of salt as optimists forecast a +10% increase in value while pessimists anticipate values staying between 4-5% lower.
Of course, regardless of who is correct in terms of the peak value of homes in 2018, it seems that many investors concur that homes are ripe for the selling from a valuation POV. The majority of forecasters concur that large-scale investors will start selling off the homes in their portfolios; this trend is expected to perpetuate for the next three to five years. For the average home buyer, this is positive in that homebuyers will not be competing with investors for properties.
Predictions for Buying & Selling Real Estate in 2018
Despite the lack of competition from investors, we are still expected to see fewer new sellers on the market as well as a higher margin of buyers than sellers. Part of this is due to the fact that remodeling, renovating, or rebuilding an existing property will be a favorable alternative to relocating for many.
Another reason is that there will be an increasing buyer’s market. In 2017, rental prices increased; we anticipate this to continue and to drive former renters to buy as buying makes more financial sense than renting in today’s market.
If this is the case, then we can reasonably assume that existing properties for sale will continue selling with rapidity; though, it’s projected that sales will not be quite as fast as they were in 2017. In 2017, South Walton Beach real estate moved faster than the beignets at Café Du Monde on a Saturday morning in New Orleans. Sales were being made within mere hours of a listing hitting the market.
Given interest rates are expected to increase to about 0.4% and there will be a continued appreciation in homes (around 3-3.5%, so about 1% less than 2017), sales are anticipated to slow down slightly, but it’s still expected that there will be a higher ratio of buyers to sellers.
Florida Tourism Forecasts for 2018
As with the overall real estate market, 2017 was a great year for tourism in Northwest Florida. It’s undetermined what 2018 holds for this area as many international tourists have shown a declining interest in visiting the U.S. in recent years. Given that more Americans are favoring international travel as of late, this could put a damper on regional tourism in 2018.
That said, as 30A continues to grow and evolve, there are some predictions that will lead to 30A continuing to be a favorite destination for years to come.
- The unique culture and architecture of communities like Alys Beach will perpetually draw crowds
- Traffic challenges that could be a deterrent during heavy periods of tourism will be resolved with Sunshine Shuttle’s free shuttle service
- 30A’s identity will be defined by ecotourism, making it unique from other beach destinations
- Joe’s long-term development will create new communities, activities, and access to 30A that maintains the area’s upscale integrity while also making it more desirable for locals and tourists
Despite the forecasted growth for the 30A / South Walton Beach area, the integrity of the area will remain intact; provided that remains a priority for developers, new investors, and new homebuyers, the real estate market for South Walton Beach will continue to thrive.
It looks like 2018 is going to be a great time to buy or to sell. Contact local realtor Cameron Strayhan, and let her legal expertise and knowledge of the real estate market guide you to your new life on 30A.