There are two primary schools of thought about the residential housing market in 2019. The first is that there will be a recession. While not as deep as the last one, it will drag down home prices, nevertheless. The second is that the economy will continue to be healthy, albeit growing at a slower rate. Low unemployment and the ongoing benefits of tax cuts and low interest rates will still drive a good housing market over the foreseeable future. Right now, the case to sell a house before the market deteriorates is a strong one.
According to Danielle Hale, chief economist of Realtor.com:
It’s definitely still a seller’s market in most of the country. But it’s not the same seller’s market that you saw in the last couple of years. You might have to think about how your home compares to the competition that buyers are going to see when they’re shopping. And you might have to price a little bit more competitively, or think about other enticements to attract buyers.
Realtor.com gives five reasons to sell this year:
1. “You won’t be the only listing for long.” Inventory, scarce for several quarters, is beginning to rise.
2. “You still stand to make a ‘handsome profit.'” While home prices continue to rise, some pending home sales data point to an unsettled future.
3. “There’s high demand for homes under $300K.” Very simply, for people who want to sell relatively expensive homes, there is a problem.
4. “Mortgage rates are at a new low.” There was a period that went on for the better part of the last year when it appeared the Federal Reserve would aggressively raise rates to fight inflation. The argument continued that a strong economy would not be hurt by a rise in rates. Two things have happened recently. The economy looks less robust. There is no inflation. However, the Fed may change its mind, so it is wise for potential buyers to get low rates while the getting is good.
5. “Millennials are flooding the market.” This is a cycle that hits when each new generation reaches the point when its members have money to buy a home. Pew Research recently reported that it would “use 1996 as the last birth year for Millennials for our future work. Anyone born between 1981 and 1996 (ages 23 to 38 in 2019) is considered a Millennial.”
However, as strong as these five reasons are, the most powerful one continues to be the next recession, particularly because it could come this year.