Predictions for 2019
As we start a new year, many people wonder what it will bring. While we do not have the ability to see into the future, we can predict what is going to happen based on where the market has been, where it seems to be heading, and influences that may help to guide it. Here are my predictions of what will happen to the real estate market in 2019.
Prices will continue to rise
Even though some have predicted prices to come down over the past year, they have continued to climb. The increase is much lower than in the recent past but it is still going up. Expect the same to continue with an increase around 4% to 5% on average.
Condos will continue to be in demand
With first time home buyers still trying to get into the market, condos and townhouses will continue to be in demand. While prices on these properties have gone up faster than detached homes in the recent past, they are still more affordable and offer the opportunity to get into the market.
Qualifying may become easier
Many people have not been able to qualify for a mortgage with the big banks under the new rules. According to mortgage brokers, the borrower rejection rate in early 2018 from these lenders has gone up as much as 20%. (Read More About This Topic Here) This has driven many of them to private lenders effectively taking the business away from these lenders and affecting their bottom line. Realistically speaking, lenders – whether a bank or other financial institution – make money by lending money and if they are not lending money than they are not making money but they are watching private lenders get the business. Expect to see these big banks lenders loosen up their “rules” to try and make up on these losses in the real estate market in 2019.
Interest rates will continue to climb
According to a recent Reuters Poll (View article here), the Bank of Canada is expected to increase interest rates three times in 2019. According to an article published in late 2018 by Global News (View It Here) the big banks are predicting the interest rates will climb by 2.25% to 2.75% by the end of the year. Whether these numbers are accurate you can expect to see some increase in interest rates.
Properties may continue to sit on market longer
Properties are now sitting on the market for an average of thirty to forty days. While recent years have seen shorter periods, historically properties have been on the market for long periods of time. The current return to normal longer periods will continue as many sellers are stuck on peak pricing and are not willing to entertain lower offers that come in.
The real estate market in 2019 continues to be one of the best avenues for investment and as we head into the new year the market is a much healthier one than it has been over the past several years. Whether you are buying, selling, or investing this year, my main point of advice would be to really do your homework. Crunch those numbers and seek the advice of a knowledgeable real estate agent.
If you have any question about real estate, please contact Ryan Ligeza, Sales Representative, Keller Williams Edge Hearth & Home Realty, Brokerage.