If you are planning to buy or sell a home this year, you definitely need to be aware of the real estate trends expected for the remainder of 2018. 2017 was a seller's market and 2018 is expected to to be much of the same. Buyers can expect to see few houses on the market and higher prices for those that are for sale.
Tiny houses, co-living spaces, higher prices, fewer tax benefits for home ownership, and a fast-moving process will all dominate 2018. Keep reading for 7 of the real estate trends you can expect this year.
2018 Real Estate Trends
Some experts wondered if the market would start to cool in 2018, but that hasn't been the case. Prices are increasing, homes are in great demand, and there is not enough supply to meet the demand. Home sellers sell their homes quickly, at full or above asking price, and potential buyers often end up in bidding wars with other buyers.
Some other trends that you can expect in 2018 include:
1. Tax Reform Impacting Home Ownership Benefits
Changes to the tax code could limit the benefits of homeownership. Currently, homeowners can deduct state and local property taxes, but the new tax code would cap that amount at a standard deduction of $10,000. Since the tax code changes just went into law this year, we won't know the full impact on the housing market until next year.
2. An Influx of Millennial Buyers
Millennials are moving into their mid-20s and 30s and have the financial security to purchase homes. They now make up the largest proportion of home buyers. They are also seeing their salaries grow, allowing them to buy more expensive homes.
3. An Increase in Micro-Units and Tiny Houses
Micro-units, which are tiny apartments for rent, are becoming more and more popular. Tiny houses are gaining in popularity too, likely due to TV shows focused on tiny house living and a desire to live a life of minimalism. Downsizing is attractive to many people looking to save money and reduce consumerism.
4. A Rise in Short-Term Rentals
Airbnb has made it easier and easier for homeowners to rent out part or all of their home for a short-term rental. Finished rooms over garages, carriage homes, or even a room within the main house can be rented on a short-term basis using an app like Airbnb.
5. Fractional Investing
Fractional investing uses techniques like peer-to-peer lending and crowdfunding to invest in properties. Rather than getting a mortgage, you might have fractional investors each contributing small amounts to your property. The downsides of fractional investing come when you try to sell the property.
Trying to sell a property with multiple owners and investors can be cumbersome.
6. Smart Home Technology
Smart home technology is becoming more and more popular, especially among millennials. Products such as video doorbells, home management systems, smart thermostats, and video surveillance systems will dominate the smart home market.
7. A Hot Market in the South
While California has traditionally had one of the hottest markets, experts expect the Southern real estate market to take off in 2018. Many southern cities have been attracting corporations, resulting in strong economic growth.
Growth projections for the South are 6% while the rest of the country is only expected to see a 2.5% growth. It's expected that cities like Tulsa, OK, Little Rock, AR, and Charlotte, NC will see increased sales in their housing markets.
The Bottom Line
If you are planning to sell this year, it is your time and you can expect to sell your home quickly and at the full asking price. If you're buying a home this year, you probably won't have as much luck as home sellers.
Keep up with real estate trends and read more about property ownership, tips for buying and selling, and taking care of your home on our blog.