My Market watch shows you stats here in our Denver Metro and Boulder County real estate market TODAY, but a lot of people want to know what the FUTURE holds, both locally and nationally. Good news for you….I have a crystal ball. Ok not really, but I scoured all the key data points and publications and put the key info below for you so you can see the future!
NEW HOME SALES
New Home Sales closed out 2017 at their highest annual total in a decade, 14.1% ahead of a year ago. They were down 9.3% in December, but the post-hurricanes boost is over. (Kiplinger Letter 1/2018)
TAX REFORM WILL BOOST REAL ESTATE MARKET
- Overall the tax reform will be a positive thing for the housing market. Homebuyers will have more disposable income to purchase a home. This will increase demand.
- New Home Builders are benefiting from lower corporate tax rates. This will result in increased profits. Many believe this will result in increased residential construction which will increase supply which is needed to bring many local markets more in balance.
- The cap on property tax dedutions for mortgages over $750,000 may slow more expensive markets and luxury homes.
INTEREST RATES WILL KEEP RISING
- Experts are expecting 3 more rate increases in 2018. This makes mortgage payments higher so buyers have to buy in a lower price range to have the same payment they would have with a more expensive home previously. This typically slows price gains, which is a big reason why HOME PRICES ARE EXPECTED TO MODERATE in 2018. Banks are making more profits on loans but don’t expect them to pass these along to consumers. The days of under 4% rates are likely well behind us.
HOME PRICES EXPECTED TO MODERATE
- Home builders will increase housing supply
- Interest rates have risen and will continue to, so this lowers affordability for home buyers
- More homeowners will sell this year because out of fear they will miss selling at the “top” of the market
- All of the factors will put downward pressure on home prices. Many do not believe (nor do I) that home prices will drop. However, this pressure will keep them from continuing to rise at the unprecedented appreciation levels we have seen over the last few years
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I liked that this pointed out the home buyers will have more disposable income to purchase a home. My friend wants to purchase his first home soon. What are some tips for choosing a great real estate agent?