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Real Estate Forecast For 2019 Shows A Dip, But A Nice Rebound On Horizon With Still Low Loan Rates

real estate forecast

Despite all the uncertainty hovering over the economy, one real estate forecast for 2019 points to a silver lining for home sales this year and especially the following year.

One place where we like to review housing forecasts is the Mortgage Finance Forecast from the Mortgage Bankers Association.

After all, these people need to have their fingers on the pulse of the market as much as Realtors. If there aren’t many mortgages being underwritten, there ain’t going to be many home sales either.

But their outlook is promising.

Real estate forecast 2018 vs. 2019

For example this is how they see existing homes sales (including condos) per quarter for 2019 compared to 2018 (in thousands)

  • Q15,387 vs. 5,507 last year
  • Q2 5,553 vs. 5413
  • Q35,641 vs. 5,273
  • Q45,659 vs. 5,275 forecast, official tally not in

There’s an upturn predicted for EVERY quarter except for the first one.

The forecast for 2020 looks very promising, where sales are predicted to take off like one of Elan Musk’s rockets.

(Ironically, the innovator has plans to send his massive Space X rocket to Mars the first years of the next decade. Sure shows an optimistic spirit. That enthusiasm might just catch on, since we know much of the economy is driven psychologically. Just saying).

The 2020 forecast for Total Existing Homes Sales (in thousands) is very bullish.

  • Q1 – 5,701
  • Q2 – 5,732
  • Q3 – 5,707
  • Q4 – 5,722

See the bump. The MBA says home sales will be 5,387,000 these first few months but predicts growth upward to 5,701,000 in the same period in 2020.

That’s cause for optimism.

To sum it up, here’s the total forecast for existing home sales per year in the next few years:

  • 2018 – 5,367,000 
  • 2019 – 5,560,000
  • 2020 – 5,721,000
  • 2021 – 5,848,000

That’s a very nice picture indeed.

2019 mortgage rates will increase slightly, but are still incredibly low

The outlook for mortgage rates which affect home sales is optimistic as well.

In 2018, 30-year fixed mortgage rates ranged around the 4.5% rate and trended upward.

For 2019, here’s the prediction from the MBA:

  • Q1 – 4.8%
  • Q2 – 4.9%
  • Q3 – 5%
  • Q4 – 5%

For 2020, the mortgage economists predict a slight bump averaging 5.1%.

Sure, many people start to panic when they see mortgage rates increase.

However, when you put a 4.8% interest rate in perspective for the rate in the past 40 years, it’s still a blessing with a big “B” for home buyers.

According to Freddie Mac, in January 1982, mortgage rates for 30-year fixed home loans were as high as 17.5%.

Ouch. Talk about burdensome monthly payments.

For decades mortgages rates hovered in the 7% to 9% range.

They finally broke into the 3.8% range in 2012.

Show that chart to any Millennial who might be concerned about mortgage rates going up.

Just point out, folks, “you ain’t seen high mortgage rates” like we used to experience in the old days.

The mortgage and real estate industry probably need to do a concerted effort this year to remind consumers how these mortgage rates are still at bargain basement levels.

A few decades ago, this writer remembers when his father told him about the 4% mortgage rate he paid in the 1960s. Wow, did that sound incredible compared to the 10% rates that were prevalent at that time.

Who would have ever thought incredibly cheap rates would drop to those levels again?

But they have. Millennials weren’t around in the 60s so they don’t realize just how good they got it.

One role of a real estate professional is to remind them.

Learn about lead gen and other upgrades

Sure, the real estate business had a nice boom going for a few years. A slowdown is inevitable. The market ebbs and flows just like the tide.

The tide might go out a little in the next few months. But the loan experts who monitor and forecast the markets closely see improvements coming quickly thereafter.

According to the MBA, keep your eye on the immediate horizon toward mid-summer. The winds are going to be blowing favorably and those home sales are going to be picking up once again.

One more point – when things slow down, business people tend to pull back on their marketing efforts. But McGraw Hill once conducted a study that found those businesses that stepped up their marketing efforts in a downturn actually did better than those who buried their heads in the sand.

And when the economy recovered, those aggressive companies were already up to speed and able to go full throttle

If you want  input on some smart real estate and mortgage lead generation, social media and other marketing strategies for 2019, contact the experts at Home Junction.

We have a giant array of proven marketing tools that consumers want such as:

  • Home Value Widgets (Automated Valuation Models) and plug-ins that are very effective for lead generation)
  • Real Estate Data APIs that can supply a vast amount of hyper-local data from school information, school attendance zones, recent property sales, market trends, neighborhood demographics, local amenities and much more. Great fodder for social media posts.
  • Geo-spatial boundary information and mapping capabilities
  • WordPress real estate themes that are search-engine enhanced to optimize content and Google and Bing rankings
  • WordPress real estate plug-ins to add super features to any real estate website
  • MLS API services and feeds that are fast, accurate and updated regularly to provide the latest listing info
  • SEO services to help improve free organic rankings for targeted keywords

It costs nothing to speak with one of our experts. The phone number is 858-777-9533.

But that call to learn the latest advances in real estate technology could just be the difference that gives your firm a competitive edge in 2019, and puts you in a great position for the rebound predicted to come.

 

 

 

Real Estate Forecast for 2018 Is A Positive One, But Is Your Real Estate Website Maximized For This Windfall?

real estate forecastWhile the real estate forecast for 2018 is looking very bright indeed, are you still using a clunky old website from years ago?

Have you seen the data? All indicators are a “go” when it comes to the economy in 2018.

Finally. After suffering through an anemic economy with slow growth since the Great Recession, it’s great to see the economy will be back on all cylinders next year.

Home prices are strong. Tax cuts are coming. Employment is at an all-time low. The stock market is at all-time highs.

Whatever your political affiliation, if you are a real estate professional, this next year your main concern should be to grab a big chunk of that housing market because it should be a good one.

As everybody in the biz knows, perception is reality.

Right now, consumers are feeling good. And they should.

Let’s take the numbers for GDP.

If you recall, back in  2008, during the Great Recession, the GDP dropped to us minus -.3%. That’s not good at all. Nobody is thinking about buying a house in that climate. They are just worried they will have a job to keep a roof over their heads.

The following year, 2009, was a real nightmare. GDP was minus -2.8%.

Then we had:

2010: 2.5%

2011:  1.6%

2012:  2.2%

2013: 1.7%

2014: 2.6%

2015: 2.9%

2016: 1.5%

Sluggish, especially when the GDP is below 2%. China by contrast continues to roar in the 6-7% GDP growth rates.

Now let’s look at the end of this year.

According to the Bureau of Economic Analysis, the GDP in the 2nd quarter of 2017 was 3.1%. That’s certainly an upsurge from 1.5%.

It’s gets better. For the 3rd quarter, the GDP grew to 3.2%.

Those are certainly signs that an economy is taking off. A very promising environment for a positive real estate forecast indeed.

Mortgage rate forecast predicts low rates

Let’s look at housing. We like to use numbers from the economists at the Mortgage Bankers Association. Because after all, most people won’t be buying a home without a mortgage. So these economists certainly have their ears to the ground when it comes to forecasting home sales

And their forecast is an optimistic one.

First off, mortgage rates will continue to stay relatively low, which of course, is fantastic for home sales. (Do you remember the days of 9% mortgage rates? Wasn’t anybody buying homes then.)

Here is their 2018 forecast for loan rates per quarter for a 30-year fixed mortgage:

Q1 – 4.3

Q2 – 4.5

Q3 – 4.7

Q4 – 4.8 (forecast)

That’s an increase from the third quarter of 2017 when rates were 3.9%. But as we said, 4.5% is certainly better than 9%. It’s a great window for borrowers. And as rates go up, they will certainly see that window start to close. So they know it’s time to get in a home fast.

MBA real estate forecast calls for growth

What does the MBA say about home sales?

They predict total Existing Home Sales for 2018 will be:

Q1 – 5,486,000

Q2 – 5,604,000

Q3 – 5,702,000

Q4 – 5,725,000

These were the existing home sales figures from 2017 (they are lower).

Q1- 5,620,000

Q2- 5,563,000

Q3 – 5,393,000

Q4 – 5,394,000 (forecast)

If you are a broker or agent, these are nice numbers. The real estate forecast for this next year is sunny, with little chance of obstacles.

Which begs the question?

Is your website ready for 2018? Or are you still using a boring old website from a few years back with a limited amount of information and an old-fashioned design.

Have you done everything you can to maximize your website for the housing windfall that is forecast for next year?

Maybe not. The first thing you should do is call Home Junction Inc. We are the real estate website experts.

In a nutshell, here’s how we can optimize your real estate website

1. WordPress platform – if your website is not using the No. 1 content management website in the world, then you might be in trouble. WordPress is the undisputed winner when it comes to websites. The website is coded to be super-friendly for users. You don’t need a webmaster to add content. The process is extremely simple.

You can add photos, text, listings, testimonials, whatever, in seconds. Display all those home listings in beautiful, bright, big image galleries. Fill that website with plugins and important real estate data.

2. Search Engine Rankings – Which leads us to the second benefit of a WordPress website – Google and Bing love this platform. It is coded in a way that is very easy for their bots to read and rank. And when consumers hit their computers next year and start searching for homes (which as we know 90% of them do), you will want to be in the top rankings to capture those consumers.

3. Real estate data – today’s home buyers live on the Internet. Millenials were born on the Internet. But even Baby Boomers will turn to their laptops, iPhones and iPads to look for homes. Those consumers are looking for information, and you certainly don’t want them to look elsewhere for Property Sales, Home Sales Trends, Local Schools, Demographics, Crime Statistics, Cost of Living Indices, etc.

You want to be able to show home buyers you are the No.1 resource in their local market. Home Junction can supply you with the hyper-local data to make that happen. (You can use that same argument to attract sellers – show them how you have more local, relevant information than your competition).

4. More enhancements – The staff at Home Junction are the experts when it comes to real estate websites. They’ve developed thousands of them. They know what works and what doesn’t. For that reason, they have a full array of tools – WordPress plugins, SEO services, Lead Generation opportunities, Home Value Estimators, Geo-Spatial Widgets, two IDX platforms for pulling in MLS listings and much more.

What’s missing from your site? Are you doing all you can to capture leads? Could you be left behind by others with better websites?

If the economy in 2018 is going to be hitting on all cylinders, then you need to be sure your website is hitting on all cylinders next year as well.

As you can see by historic data, the economy is not always on the side of brokers and agents. Next year, the real estate forecast is that it will be a banner year for home sales.

Call us to make sure you are ready to lead the charge into that forecast.