More than 64% of households have at least some of their assets in real estate. For such a popular investment, however, the housing market can be challenging to keep up with. Your potential return is influenced by everything — changing mortgage rates, the ins and outs of your town’s real estate economics, and design trends that suggest when and how to remodel.
Whether you’re staying put or looking to buy a home in the upcoming year, learn what to expect from the real estate market with the predictions below.
Expect steady rate increases: Mortgage rates have risen faster than economists predicted, climbing steadily through early September 2018. Kiplinger predicts that the beginning of 2019 could see a 15-year rate around 4.3%, and a 30-year rate around 4.8%. If the trend persists, it may deter some potential buyers.
Home price gains may slow: The CoreLogic Home Price Index and Forecast is anticipating a 5.1% increase in home prices by July 2019. That would be a decrease from the 6.2% increase year-over-year in July 2018. If interest rates for mortgages do continue to rise, that could mute the increases even more as buyers stay on the sidelines.
Seattle is sizzling: Seattle stole the spotlight as the top emerging real estate market, according to PWC’s Emerging Trends in Real Estate for 2018. Austin, Salt Lake City, Raleigh/Durham, and Dallas/Fort Worth round out the list, and are expected to remain strong markets through 2019. Top cities have strong population growth, are highly livable, and have an affordable cost of living, among other factors.
Low inventory: Half of the top 50 markets in CoreLogic’s July 2018 Market Condition Indicators survey were considered overvalued. Homeowners in these markets are expected to hold onto their properties for longer, hoping for even greater value gains that can deliver them additional profit, and this will keep inventories low. However, nationwide, inventory did slightly increase in the first half of 2018. This slight increase doesn’t necessarily foreshadow another housing crisis: Inventory is sitting at just over 4 months, as compared with 12 months in the oversupply condition of the housing market crash, and 6–7 months of inventory in a balanced market.
Competing against cash: Investors buying with cash have swooped into the residential home market. During the first half of 2018, 87% of single-family homes and condominiums in Detroit were bought with cash, compared with 28% nationwide. Investors buying into Detroit are mostly interested in flipping and reselling distressed properties, a trend which will likely continue in low-cost areas with potential for growth.
Celebrate color: If you’ve always secretly wanted to paint your bedroom a hue of your favorite color, now is the time: Gray is out, color is in. Earthy pastels gained steam in the interior design market in 2018 and are likely here to stay. Think subtle colors that appear in nature, like apricot orange, pale or matte whites, mint greens, jade, and sage green.
Metallic mania: While metals have been infiltrating the interior design market since 2017, their popularity hasn’t slowed. For a quick update to your abode, look at incorporating copper or brass in a new faucet, set of drawer knobs, or lighting fixture.
Reuse, recycle: If there is one design trend that is out, it’s purchasing “fast furniture.” Instead of running to a discount store to stay up with the season’s latest trends, try repurposing an old piece of furniture. Sometimes all it takes is a little sandpaper, chalk paint, and creativity. Sustainable fabrics like animal-free leather and worm-free silk are also expected to hit the market in 2019.
Smart appliances: If you thought smart appliance capabilities had already infiltrated every aspect of the home, think again. In 2019, Nest Thermostats, Roomba vacuum cleaners, and Wi-Fi-connected refrigerators will be joined by the latest in smart appliances: mirrors and microwaves. Products like Seura Bathroom Mirrors turn your morning routine into a connected experience with time, weather, email, and calendar applications, and the Whirlpool Smart Over the Range Microwave allows user to send cooking instructions from their smartphones — forget pressing buttons!