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Luxury Home Market Forecast for 2019

Luxury Home Market Forecast for 2019
2019 Luxury Home Market Forecast
Oakland County, MI

The Year Ahead in Luxury Real Estate

Welcome to our monthly luxury home market forecast!

As the year came to a close nearly a week ago, we wanted to take a step back and evaluate the current state of the real estate market and give you a forecast on the probable 2019 market trends locally and nationally.

Recap of 2018’s Market State

In 2018, the housing market experienced its fair share of volatility, attributed to many factors, including affordability and inventory concerns. The beginning of the year saw many markets with home prices still at their highest when viewed over the last 10 years and mortgage rates at an all-time low, which gave a definitive upper hand for sellers. Similarly, our local market in Oakland County was one of the many markets that experienced a seller’s market.

During the later part of 2018, home price growth faltered, the number of sales month over month fell, rates steadily rose to their highest point in nearly eight years, inventory increased and so the favor slowly started to shift from seller to buyer. Now, this is somewhat expected year-over-year in Michigan due to our various seasons. However, the drastic changes proved it to be much more than a seasonal indicator.

In addition, many would-be homebuyers, deterred by high mortgage rates, chose to fix up their current homes rather than seek a new dream house. “Mortgage rates have been rising for two years and lots of homeowners are locked into low rates they don’t want to give up by selling their current home, so they’re fixing up instead of moving up,” NerdWallet mortgage expert Holden Lewis said.

Demand | Interest Rates

In the new build industry “Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices,” National Association of Home Builders Chairman Randy Noel said.

However, in early December mortgage rates finally edged down – which experts align to the recent volatility in the US Stock Market…so perhaps homebuyers will be headed into 2019 with more confidence.

Todd Probasco, Lakeside Bank’s Vice President, said, “interest rates hit 5% a month ago and rates have been going up for the last year, so that reduction is a big move in the housing market.” And also believes that “the majority of transactions in 2019 will be purchase, although there will still be some refinance.”

Luxury Home Market Forecast for 2019
2019 Luxury Home Market Forecast
Oakland County, MI

Market Trends & Predictions

Market trends for 2019 have experts providing predictions that offer little change to the conditions in the market currently.

A large number of millennial age group will be turning 29 next year, entering peak household formation and home-buying age which is anticipated to contribute heavily to the increase in first-time buyer demand.

This typically would have a knock-on effect with the next group upgrading to more expensive homes, but if this is slowed by increasing interest rates, then the biggest problem will become affordability and lack of inventory in the entry-level market.

Experts predict that despite the recent decrease in mortgage rates, that they may start to rise again in 2019, which will obviously cause a further slowing of the market.  On the positive side, this does allow home purchasers, who have struggled to buy in previous years, the opportunity of stability in both price and time to organize appropriate financing.

But even if the slowing market allows for more inventory in the non-entry level markets, experts are still predicting that this will still not meet the demand for homeownership …which puts pressure on supply for first-time home buyers, therefore, allowing homeowners who wish to upsize into more luxurious homes and so this should create more demand in each of the markets as we take on 2019.

Luxury Home Market Forecast for 2019
2019 Luxury Home Market Forecast
Oakland County, MI

Conclusion

So, overall predictions have the medium and long-term prospects for the housing market to remain good, mainly because demographics are going to continue to support demand.  A slowdown in 2019 creates a healthier housing market going forward.

To stay up to date with the latest in Luxury Real Estate throughout 2019, check out our Monthly Luxury Market Updates!


For more information about luxury real estate in Bloomfield Hills, Birmingham, Franklin and all other areas in and around Oakland County, contact me directly.

Yana Krefman
Certified Luxury Home Marketing Specialist™ (CLHMS) | REALTOR®
KREFMAN REAL ESTATE GROUP – FORWARD, REALTORS®

Direct: 248-410-9550
Yana@KrefmanGroup.com
www.krefmanrealestategroup.com

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Krefman Real Estate Group

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