Contrary to many New Englanders, we love this time of year for a lot of things: skiing, NFL Playoffs and especially the cornucopia that is the 2018 housing market forecast. We've done a good bit of researching about predictions for 2018, and while we were not particularly surprised, we took interest in some significant trends according to the many realtors and housing analysts who offered their opinions.
So here are some of our takeaways:
1. A tax-aided exodus
The recently signed tax bill includes a provision that the tax deduction for local and state taxes now be capped at $10,000. This may be the impetus for more homeowners in high-tax states to consider moving to regions of the U.S. where housing is not as expensive. For example, a condominium in a high-tax Boston suburb, is comparable to a spacious 3-4 bedroom home in the midwestern or southeastern U.S.
Said Best Agent Today CEO Rich Rubino, "This is the classic 'vote with your feet' scenario that everyone learned in high-school civics. We don't believe that too many people will opt to move out of the cities into the 'burbs strictly because of this, but combine that with increased availability of working remotely, and you may see some movement here."
2. Slower growth for housing costs
The figures differ slightly according to experts, but home prices grew between 6.2-6.9 percent in 2017. A recent survey by more than 100 housing experts predicted home price escalation to slow to about 4 percent in 2018.
3. Remodeling and staying put
One claim from various 2018 housing market forecasts says more homeowners are expected to choose to renovate their homes rather than move, if presented with such an option. The reason for this is a reported lack of inventory -- where consumers stay put, fearing an inability to find a home once putting theirs up for sale. Thus, they opt to renovate.
"This one renews with every cycle in the market," Rubino said. Sometimes due to more expensive starter homes, sometimes easy 'home improvement' lending, and sometimes people just want a nicer home right where they are."
4. Suburbs (not so much cities) will attract more professionals
Does any working taxpayer type actually live in Manhattan anymore? Or San Francisco or Boston proper? OK, we're exaggerating, but these city locales are downright expensive! From what we've read, millennials and thirty-somethings will continue to prefer the suburbs despite the longer commute to work in the city.
5. A spike in starter homes
According to a recent study, the amount of newly-built homes peaked in 2006 at nearly 2 million, then plummeted significantly over the next five years, the result of the housing crash. Since 2011, however, the amount of new home construction is showing signs of life: though far lower than 2006, nearly 1 million new houses were built in 2015.
Bonus prediction: Best Agent Today targets significant growth
We love what we do and we're proud to offer our services in seven destination states and cities such as Peoria, Ill., and Las Vegas, Nev. We're not resting on our laurels, however. With our unique and easy solution for offering the top selling realtors in these locales, we've got plans to expand and contribute positively to the 2018 housing market forecast.
Stay tuned to this space.