A Few Predictions for Our 2018 Market

    Our 2018 market should continue to see a healthy, moderate amount of growth. We’re seeing growth in the number of sales, the level of inventory, and the average sale price.

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    If you’ve been watching the news lately, you might have seen market reports for our Alabama Gulf Coast region that have given you pause. We’ve got record-low levels of inventory, record-high prices, and things are growing at a very robust rate.

    I predict, however, that our market will continue to see a healthy, moderate amount of growth in 2018. Right now, we’re seeing growth in three key areas: sales, home values, and inventory.

    Regarding inventory, I think it will increase slightly as long as consumer confidence grows and the unemployment rate stays low. The question of whether we’re in a buyer’s or seller’s market has a mixed answer because there are a lot of pockets between our two neighboring counties that switch between having tight inventory and struggling to get inventory levels down.

    Speaking of our two neighboring counties, let’s compare some year-over-year numbers from 2016 to 2017 in both Mobile and Baldwin County.

    In Mobile County, home sales increased 0.5%, the average sale price rose 3.8%, and the average days on market dropped 10%.

    “First-time millennial homebuyers will continue to enter our market at a healthy rate.”

    In Baldwin County the numbers are stronger, but we have to keep in mind that Baldwin County started on its downward spiral in 2017 much faster than Mobile County. Consequently, it’s on a faster incline too—home sales rose 7.3%, the average sale price rose 2.1%, and the average days on market dropped 40%.

    The condo market is a much tighter segment overall. Sales are up 11%, which is great news if you’re a condo owner. The average sale price of condos also rose 14%, while the average days on market is down just over 20%.

    Finally, let’s look at interest rates. All indicators point to a rise in interest rates, but here’s the caveat—they’ll still remain ridiculously low. We’ll probably see a cap right around 4.5%.

    What does all this mean? These trends will continue to drive the millennial first-time homebuyer market. This segment came on strong toward the end of last year, and as long as they stay mindful of the fact that high down payments and high-qualifying credit scores are a thing of the past, they’ll keep entering the market. They’ll also keep being driven into the market by rising rents.

    If you have any more questions about our 2018 market or you’re thinking about buying or selling a home, don’t hesitate to reach out to me. I’d be happy to help you.

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