We’ve just scratched the surface of 2018 so it’s time we look ahead to see how the real estate market will fare this year. While we may not be able to fully predict the future, we do have access to experts nationwide who can provide insight into some trends that may last through the year.
The 2017 year ended strong, particularly with existing home sales skyrocketing to an 11-year high. Demand remained high and supply was low, allowing sellers to put more money in their pockets with each sale. At the same time, mortgage rates steadily held historically low, tempting more buyers to take advantage. Many real estate experts expect 2018 to remain steady in these aspects and we may even see continued growth in residential sales. Mortgage rates are expected to continue to remain low and inventory shortages will most likely drive the market, causing more competition for buyers.
Our economy has bounced back in recent years from the real estate crash back in the mid- 2000’s. Now, it appears that the economy will continue to be healthy and stable.
“The economy is healthy overall and people have money again,” said Mike Duffy, president of United Country Real Estate. “There isn’t anything specific that will sink our economy so there’s no end in sight for the next year or two. Residential sales have really exploded. The challenge is the lack of supply. But interest rates remain low, so I think this will be another year of strength. It’s all a reflection of people having money, jobs and taking care of bad debt. Now, people want houses.”
Another area that has seen some dramatic increases is recreational property (hunting, fishing, hiking, etc.). Duffy said United Country Real Estate saw double digit increases in recreational land sales in 2017 and expects to see that trend continue in 2018.
“We could see things boom even more in 2018 and I’m excited and enthusiastic about that,” said Duffy. “Our agents excelled in recreational land sales last year and I think that trend should continue. My guess is that vacation properties, or second homes, will also do well since people have the money.”
On the flip side, farmland and ranchland sales are still struggling. Low commodity prices and large amounts of inventory continue to leave the farmland market stagnant. Besides a few of the Corn Belt states, the market is locked. Multiple UCRE agents have even noticed the sale of multigenerational farming operations across the country due to loss in revenue.
“Farmland sales will be comparable to 2017 as we head through 2018. There will be very little growth and that’s a big problem for farmers,” said Shawn Terrel, president of United Country Auction Services and farmland owner. “Despite there being some hot spots in states like Iowa, Illinois, Indiana and Ohio, many farmers are operating on credit right now trying to survive and they will end up caught in the crunch unable to pay their loans back. And even if they decide to sell their farmland, it will sell very quickly, but they won’t get much for it. This is good news for buyers, but farmers looking to sell could be in a tough spot.”
Overall, putting your money in real estate in 2018 sounds like a good choice. We are going into the second year of a very strong housing market.