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Real Estate Markets: What's Hot and What's Not for 2019

2019 seems like a confusing year for real estate. There's have been whispers of a looming recession, interest rates are volatile, and home sales are falling. It seems as if you'd need to be a psychic to get to the bottom of the latest housing trends, but that isn't necessarily the case.

Just as with any market, some things and places are hotter than others, which creates opportunities depending on your stake in this space. Here are some trends to watch in the 2019 real estate market, including which markets are hot and which ones are cooling.

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Economic Trends that Impact Real Estate

People can't build or buy homes if the economy is a mess. We need only look at what happened in the wake of the last financial crisis as evidence of this. Since the Great Recession, this country has experienced a long period of steady economic growth. Unemployment remains at its lowest rate in 50 years, consumer spending is up, and wages are beginning to grow at a faster rate.

Supply and Demand in the Housing Market

This combination of factors has led to surging demand for homes, but there also continues to be a supply issue. Consumers that have more money in their pockets either want to make a first time home purchase or trade up. Even though interest rates have gone up, mortgages are still affordable, which helps sustain demand.

Unfortunately, there are fewer homes for sale than there were before the last financial crisis. Some home builders have been slow to re-enter the market, and there is a shortage of skilled labor to build homes. The rising prices of homes on the market have incentivized some homeowners to hold onto their homes instead of selling them.

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Real Estate Market Trends - What Hot and Not in 2019

While there are whispers floating around about a possible recession, experts warn that what might be on the horizon will not resemble what hit this country in 2008. There are now tighter restrictions on lenders that will prevent what is called a "hard landing" and household budgets remain incredibly healthy.

If anything, the National Association of Home Realtors expects a "soft landing," which it defines as a slowing of the growth rate in sales and home price increases. Specifically, it predicts home sales to increase just one percent in 2019 over the prior year and the median home price to go up around three percent.

There are also projections that interest rates will continue to increase, but this is never set in stone. By increasing the federal fund rates, the Fed wants to prevent a hard landing and help the economy grow at a steady pace in 2019.

The Real Estate Market - Hot and Cooling Areas in the U.S.

When it comes to "hot" areas, Realtor.com recently analyzed the 100 largest markets in the U.S. and narrowed down the top 10 hottest markets based on median home prices, projected sales price growth, the local economies, and other factors.

The top 10 markets are:

  • Lakeland, FL
  • Grand Rapids, MI
  • El Paso, TX
  • Chattanooga, TN
  • Phoenix, AZ
  • Bridgeport, CT
  • Las Vegas, NV
  • Boise, ID
  • Miami, FL
  • Boston, MA

Many of the markets that are cooling, meaning that homes are taking longer to sell, are located in California. These include:

  • San Francisco
  • Sacramento
  • Stockton
  • Santa Cruz

Even so, these are still listed in the top 20 hottest markets in the country.

Buildium has produced a list of up and coming real estate markets to watch for 2019. Among the emerging areas that it expects to have booming markets are:

  • Austin, TX
  • Orlando, FL
  • Tampa, FL
  • Salt Lake City, UT

Specifically, these are areas that are gaining residents and jobs faster than the average city, so will be excellent bets for growth in the real estate sector.