Trends Within The Real Estate Market To Be Aware Of In 2018
There are expected to be various real estate trends for this year. If you are looking to invest in real estate in 2018, there are various factors you need to consider. It is important to conduct thorough research into the current real estate market trends. This will help you to overcome any obstacles you may encounter and to plan effectively for changes. Some of the most anticipated trends are as follows:
Home Price Increase Rate Will Decrease
The prices of homes has been steadily rising over the last several years. Also, the rate at which the prices are rising has been rather quick. However, this year the rate is expected to decrease. Home prices will still be rising but not at such a quick rate. For example, last year the prices rose by 6%. Whereas, they are only expected to rise by a little over 4% in 2018.
Decrease In Affordability
The overall price of homes, as well as mortgage rates, are expected to increase significantly throughout the year. This means that homes will become less cost effective and affordable for the average individual. However, those with larger monthly incomes may not be as drastically impacted by the increases and, therefore, will still be able to purchase a home this year without much consequence.
Increased Competition Among Lenders
More and more people are applying for mortgages and lenders are becoming more competitive in order to reach a higher number of applicants. In 2018, we will begin to see more stiff competition among mortgage lenders as they begin to more effectively utilize advancing technology to reach a broader applicant base, which could also lead to more competitive rates, although they are still expected to rise.
An Increase In The Amount Of Homes On The Market
Over the last several years, there has been somewhat of a shortage of homes available for purchase on the market. This is due to various factors, including the fact that many landlords and investors purchased homes directly after the economic housing bubble, so they are making better money renting than selling.
However, this year, there is expected to be an increase in the amount of homes for sell, which is good news for anyone who us looking to purchase a new home or to invest in real estate because this will provide a larger selection of homes to choose from.
Rise In Equity
Lastly, there is expected to be a rise in the amount of equity current homeowners have. This is because the value associated with homes is steadily rising. This leaves homeowners with more equity that they can borrow against. Real Estate investment expert, Co-Founder of Green Solar Technologies and Spectrum Holdings, Nicki Zvik advises, "whether and how to use leverage is a very difficult thing for a real estate investor to learn.
In general, if you have equity in a home, you should consider using it to finance your next project. However, you have to understand that leveraging gives you higher returns but with that comes higher risk." Also, when investing in real estate this year, the rise in home value can be a positive benefit, if the trend continues, because you will see a higher rate of return on your investments, if you decide to sell in the future.
Fraud Is Expected To Continue To Rise
Unfortunately, there have been many instances of fraud within the real estate market, which is expected to continue throughout this year. Some examples of fraud includes instances in which individuals are asked to send money for down payments, which turns out to be a scam. It is important to be wary of instances in which you are asked to wire money or you are sent sketchy emails.
Overall, there are various expected changes within the real estate market this year that may positively or negatively impact home buyers, as well as real estate investors. It is important to thoroughly research the market before making any decisions.
This will allow you to decide whether it is the right time for you to invest or not. Being fully aware of the state of the market will allow you to develop effective contingency plans, in which you can strategize methods for overcoming challenges within the market and create back up plans.
The real estate market is always changing. Therefore, you have to account for these changes and be aware of its evolving nature.
While 2018 may have some favorable attributes for investors, such as the fact that the rate at which home prices rise will decrease slightly and more homes may be available, it is important to consider the negative changes expected to occur within this year, such as, the fact that prices will still be increasing, as well as mortgage rates.
If you can afford to invest, this is a suitable time to do so. However, as with each decision, you should carefully consider your options and decide accordingly.