2018 Housing Trends To Watch For
It's almost a new year, and there are plenty of exciting things happening in the housing industry. Locally and nationally, what should we all be on the lookout for? We gaze into the crystal ball for a few trends to track in 2018.
According to real estate site Inman, there are a number of interesting developments to watch for one. One of the most interesting to us is the trend of millennials moving to the suburbs. Metropolitan living is highly desirable, but expensive. With student loans, many individuals and families of this generation won't be able to afford to live in city centers. Expect to see more young people popping up in subdivisions over the next few years.
This trend will have a big impact on what sort of houses are built. Instead of the big and expensive 'McMansions' that typified the previous housing boom, lower incomes amongst younger families will generate an emphasis on less expensive or 'entry-level' homes. These lower price points will appeal to lower incomes, but there is also evidence that more affordable options are attractive to families who could spend more.
Another trend affects the supply of homes. There were 12% fewer homes available in 2017, and that should decrease further in 2018. One contributing factor is how people are addressing their changing housing needs. With prices on the rise, it's becoming more competitive and cost-effective to build additions instead of purchasing a new home. This will control the housing supply but may lead to slim pickings in some markets.
Housing prices will continue to rise, but it appears that the rate will shrink slightly. According to the most recent numbers, housing prices were up 6.9% in 2017; that number will be closer to 4.1% in 2018. Supply, interest rates, and changes to tax credits all are contributing factors, but it's worth remembering that the normal rate of appreciation in the housing market is usually pegged at around 3%.
What else should you look out for? Read Inman's full piece here.
Questions about the real estate picture right here in Northern Michigan? Visit our offices in Elk Rapids or Kalkaska, and we'll be happy to answer any questions you might have!