To get an idea of what we can expect from our 2019 market, let’s start at reflecting on what happened in 2018.
In short, 2018 was a fantastic year. In our marketplace, homes appreciated by a rate of 10%, and there were 35,300 total home sales. That’s a slight drop from the 35,500 homes that were sold in 2017, but it’s still a good number and an important indicator that things are leveling off.
Why did we do so well in 2018? The answer is low supply, and that brings us to the main theme of 2019: increased interest rates. Rates are forecast to rise anywhere between 5.25% and 5.8%, and because of this, we’ll have low supply once more in 2019. Think about it—if you refinanced and your mortgage rate is at 3.5%, you probably won’t be too eager to trade that mortgage for a mortgage with a 5.5% rate.
In addition to keeping supply low, rising rates will also weaken demand slightly, and as a result, our rate of appreciation will lessen. I predict that home sales will drop by 2%, and instead of a 10% appreciation rate, we should be closer to 7.5%. Despite this drop-off, 2019 should still be another good year.
If you have any more questions about our market or you’re thinking of buying or selling a home, don’t hesitate to reach out to me. I’d love to help you.