Disclaimer: no one has a crystal ball and if anyone were able to predict real estate trends accurately with any consistency, things would be a lot different. My point is that, while I’m going to share predictions (supplied by “industry experts”), I don’t want you to take them as gospel. So, with no further ado, here are some of the expectations for this year:
- Continued low inventory will cause a mild increase in prices, but, also, will edge out first-time buyers due not only to the financial requirements, but also because of the competition among multiple buyers. First-time buyers often don’t move as quickly in a multiple-bid situation because they don’t have the experience to do so comfortably.
- Young adults will be forced, by costs, to buy in less urban areas.
- Many people, as has been the case for several years, will remodel versus move.
- The fear of the market peaking may encourage more sellers to list their homes this year (creating a slight increase in inventory).
- Increasing mortgage rates (expected to reach 5% by end of the year) coupled with the new tax laws may reduce the buyer pool. Of course, less demand will affect prices as well; predictions are that they will rise marginally, but less steeply than in the past few years.
Personally, I think we have even lower inventory than the national average which I think will transate to even more people remodeling versus moving. I don’t think the increase in rates will affect our area that much as most people buying on the Main Line are usually in a price range where the difference in their monthly payment due to a slight increase in rates is not that significant. Due to the lack in inventory, I certainly hope that sellers will see opportunity to command a slightly higher price–my buyers are so frustrated and would love more to choose from!
To see what experts are saying about the Philadelphia (city) market specifially, click here.