Real Es­tate Briefs

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Eight real es­tate trends to watch in 2019

A ro­bust econ­omy with pos­i­tive wage growth and low un­em­ploy­ment should, in the­ory, cor­re­late to a strong hous­ing mar­ket in 2019. But the head­winds of the lim­ited num­ber of homes on the mar­ket and af­ford­abil­ity is­sues are likely to test the strength of the real es­tate in­dus­try in the com­ing year.

The ar­ray of pos­i­tive eco­nomic news has kept con­sumer con­fi­dence high, even when the stock mar­ket has been volatile, ac­cord­ing to Larry “Boomer” Fos­ter, pres­i­dent of Long & Fos­ter Real Es­tate.

“All that con­fi­dence should add up to a rel­a­tively strong hous­ing mar­ket,” Fos­ter said. “It would be even stronger if there were more homes on the mar­ket, which has been a par­tic­u­lar chal­lenge around Wash­ing­ton, D.C., and many parts of the Mid-At­lantic.”

Still, both Fos­ter and Gary Scott, also pres­i­dent of Long & Fos­ter Real Es­tate, an­tic­i­pate a solid hous­ing mar­ket over the com­ing year.

“We’re bullish on 2019,” said Scott. “We’re in our third year of a cy­cle of slowly ris­ing in­ter­est rates, lim­ited in­ven­tory and ris­ing con­struc­tion costs, so we’ve ad­justed to those con­di­tions, and our mar­ket is nor­mal­iz­ing.”

Some of the trends Fos­ter and Scott an­tic­i­pate for 2019 in­clude:

• Strong eco­nomic news will keep con­sumer con­fi­dence high. Eco­nomic in­di­ca­tors are an­tic­i­pated to con­tinue in a pos­i­tive di­rec­tion in 2019, with strong GDP growth, solid job cre­ation and wage growth of 3 per­cent or higher. Those in­di­ca­tors add up to con­sumers feel­ing con­fi­dent to buy their first home, move up to a new home or in­vest in real es­tate, said Scott.

• In­ven­tory will in­crease a lit­tle but still not enough to meet de­mand. In­ven­tory will ex­pand this year but pri­mar­ily in the up­per brack­ets, ac­cord­ing to Fos­ter. De­mand is strong for en­trylevel hous­ing, but there won’t be much more hous­ing avail­able in that mar­ket seg­ment.

• Builders will face chal­lenges that will con­strain sup­ply. The high cost of land and la­bor as well as tar­iffs puts pres­sure on builders, who can’t build fast enough to meet de­mand, said Fos­ter

“Their mar­gins are squeezed, so most builders aren’t con­struct­ing homes for first-time buy­ers or even for first-time move-up buy­ers,” he said.

• Mort­gage rates are likely to rise. The Mort­gage Bankers As­so­ci­a­tion pre­dicts that mort­gage rates will reach 5.1 per­cent by the end of 2019.

“While mort­gage rates are go­ing up, it’s im­por­tant to look at them over the decades,” said Scott. “Five per­cent is still re­mark­ably low his­tor­i­cally. In ad­di­tion, in­ter­est rate creep al­ways stim­u­lates the hous­ing mar­ket.”

• Home val­ues will rise but at a slower pace. The Na­tional As­so­ci­a­tion of Real­tors pre­dicts that prices will rise about 3 per­cent in 2019 over 2018, a solid in­crease but not at the ram­pant pace of pre­vi­ous years.

“For buy­ers, slower price ap­pre­ci­a­tion is a good thing,” said Fos­ter. “Look at this year alone, when prices have gone up 6 per­cent na­tion­wide, which is twice the pace of wage growth.”

• The seller’s mar­ket will soften slightly.

“The pace of sales has slowed com­pared to last fall,” said Fos­ter. “For one thing, there’s a lack of prod­uct to sell. We also see that buy­ers are more par­tic­u­lar than in the past. If the qual­ity of a home isn’t up to their stan­dards, they’re not in­ter­ested in it.”

• De­mo­graph­ics fa­vor a strong hous­ing mar­ket.

“We have a gen­er­a­tion of over 70 mil­lion mil­len­ni­als who want to buy homes and who are get­ting older and ready to set­tle into their ca­reers and house­hold for­ma­tion,” said Scott. “We also have a gen­er­a­tion of ag­ing baby boomers who will need to down­size, and that will also stim­u­late the mar­ket.”

• In­vestors will ben­e­fit from con­tin­ued healthy re­turns.

“Tremen­dous wealth has been gen­er­ated by the stock mar­ket over the last 36 months, and I an­tic­i­pate that in­vestors will con­vert some of that wealth into rental prop­erty to di­ver­sify their port­fo­lios,” says Scott. “We con­tinue to see good re­turns on rental prop­erty be­cause de­mand is high, cash flow is good and mort­gage rates re­main at­trac­tive.”

If you’re plan­ning on buy­ing or sell­ing a home in 2019, it’s im­por­tant to put these trends into per­spec­tive and re­al­ize that your lo­cal mar­ket may not match these over­rid­ing pre­dic­tions, Scott and Fos­ter said.

“Ev­ery buyer and seller should main­tain their fo­cus on their in­di­vid­ual goals and mo­ti­va­tions,” said Scott.

Like­wise, hir­ing a real es­tate agent with a hy­per­local fo­cus is es­sen­tial for both buy­ers and sell­ers, added Fos­ter.

Berk­shire Hath­away honors sales lead­ers

Berk­shire Hath­away HomeSer­vices Fox & Roach, Real­tors re­cently saluted sales as­so­ciates for be­ing of­fice lead­ers for the month of Novem­ber 2018.

In the Col­legeville of­fice, Crista DeGrazio has been rec­og­nized for list­ings. Li­censed since 2001, DeGrazio is a re­cip­i­ent of the Chair­man’s Cir­cle Award. She is a 17year res­i­dent of Gil­bertsville.

The Himes Team, led by An­drew Himes, has been rec­og­nized for vol­ume. Li­censed since 2005, Himes, ABR, e-Pro, CRS, CNE, is the re­cip­i­ent of the Chair­man’s Cir­cle Award. He is a 13-year res­i­dent of Col­legeville.

Lau­rie Cur­ran has been rec­og­nized for units. Li­censed since 2000, Cur­ran, BAR, CRS, GRI, SRES, is a re­cip­i­ent of the Chair­man’s Cir­cle Award. She is an 18year res­i­dent of Gil­bertsville.

Mean­while, in the Jenk­in­town Home Mar­ket­ing Cen­ter, Max Cha­nia has been rec­og­nized for list­ings among in­di­vid­ual agents. Li­censed since 2006, Cha­nia is a re­cip­i­ent of the Honor So­ci­ety and Sales Per­for­mance awards. He is a seven-year res­i­dent of Hunt­ing­don Val­ley.

An­drew Smith has been rec­og­nized for vol­ume and units among in­di­vid­ual agents. Li­censed since 2006, Smith, e-Pro, is a re­cip­i­ent of the Pres­i­dent’s Cir­cle Award. He is a 23-year res­i­dent of Jenk­in­town.

The Mar­i­lyn & Stu Blez­nak Team has been rec­og­nized for list­ings among teams. Li­censed since 1978, Blez­nak, ABR, is a re­cip­i­ent of the Chair­man’s Cir­cle, Pres­i­dent’s Cir­cle, Lead­ing Edge So­ci­ety and Honor So­ci­ety awards. They are 56-year res­i­dents of Elkins Park.

The Cari Guerin-Boyle Team has been rec­og­nized for vol­ume among teams. Li­censed since 2000, Guerin-Boyle, CNE, SRES, is a re­cip­i­ent of the Chair­man’s Cir­cle Award and is a Philly Mag Five-Star Agent. She is a 27-year res­i­dent of Jenk­in­town.

The Joseph Dougherty Team has been rec­og­nized for units among teams. Li­censed since 2004, Dougherty, CNE, is a re­cip­i­ent of the Five Star Agent and Chair­man’s Cir­cle Awards. He is a 20-year res­i­dent of Philadel­phia.

An­drew Himes

Crista DeGrazio

Cari Guerin-Boyle

An­drew Smith

Joseph Dougherty

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