All of you, my clients and friends who have been following my monthly market updates via email and perhaps experiencing the 2018 housing market first hand, know this: The 2018 real estate market has not been an easy one!!! Low inventory, skyrocketing prices, etc. have led to a plateau in total revenue for the market as a whole. Higher sale-sale prices + fewer actual sales = no change over previous year on average.
Is this a bubble about to burst? I’d say no, at least not in North Texas. The reasons for this market have been mostly driven by record-level lumber prices (thanks, tariffs!), labor-shortages, tightening credit-approval requirements in the higher price-points, and even natural disasters.
There is a new market-indicator on the scene we should all start watching, and that is growth in real, disposable, personal income. Real wages have been on the rise in the second half of 2018. That has led to a bit of an uptick in existing home sales this fall, whereas new home sales have steadily dropped all year.
My forecast for 2019 is a flourishing, hot market again that will likely be healthy for three reasons:
1. Existing Home Sales have been on the up-tick, pointing to a bounce-back, and will continue as long as consumer-incomes continue to grow and if we get some relief from those lumber-cost and the other issues.
2. The huge number of housing units authorized but not yet started (about 170,000 nation-wide right now according to Inman News), is a very strong indicator, because once those new-builds hit the market we will have a ton of new inventory!
3. Perhaps the strongest and most hopeful indicator for the housing market and everyone’s well-being is a continued rise in real, disposable income. Home prices may stay high, but if our disposable incomes are out-pacing the rise in home-prices, everyone can afford to buy a home.
Do reach out to me with your questions and any help I could provide for you or someone you know. I live to help you!!!!