Top Real Estate Markets in 2019
There’s been a lot of buzz lately about who has the upper hand in the current real estate market—buyers or sellers. In recent years, the supply of existing homes for sale has fallen below demand, leading to a real estate market that tends to favor sellers.
Now, it seems the market may be changing, providing better opportunities for prospective buyers, at least in some locations. “It could even become a nationwide trend by mid to late 2020, as supply and demand conditions change,” according to the Home Buying Institute .
If you’re a homeowner—or hoping to become one—you’ve probably heard the terms “seller’s market” and “buyer’s market.” It’s all about how many homes are for sale, how many people are seeking to buy, and how that affects prices and the speed at which homes sell.
In a seller’s market, there are more buyers than properties for sale. There might be multiple offers on a home, which means it will likely sell above the asking price. And there’s less in the way of seller concessions and little time for shoppers to mull over their choices or pause before making an offer, because homes tend to sell quickly.
In a buyer’s market, there are enough (or more than enough) properties to meet the needs of home shoppers. And that can be a bonus for bargain hunters. With more inventory available, homes tend to stay on the market longer, and owners are more likely to start with a lower price, give a seller credit for closing costs or repairs, or negotiate the sale price down to make a deal.
How can you tell if your local housing market is hot (a seller’s market) or cooling down (a buyer’s market)?
You could check the inventory of unsold properties. A rule of thumb is that a “balanced” market has about a three- to six-month supply of homes for sale. (It would take up to six months to sell all the homes listed if no new properties came up for sale in the meantime.) If the supply falls below that, it’s considered a seller’s market. If the supply exceeds six months’ worth, it’s generally deemed a buyer’s market, and in these conditions you may see declining home prices.
But that’s just a theory. If you’ve ever gotten into a bidding war for a home, or had to park blocks away from an open house because so many other buyers beat you there, or had a real estate agent roll their eyes when you wanted to offer the asking price—you’ve experienced the signs of a hot real estate market firsthand.
And, let’s face it, it’s primarily what’s happening in your target neighborhood that affects you—the individual buyer or seller. The media can report about market trends, but conditions and values can differ from one city to the next—and even from one neighborhood to the next, depending on market conditions.
The Current “Hot” Lists
That doesn’t stop various websites from trying to pinpoint the hottest locales in the country, however. And sometimes they can offer clues to what’s attractive to today’s homebuyers.
For example, the locations in Realtor.com’s 2019 Top Markets for Homebuyers have a few factors in common: They’re experiencing solid job growth and lots of new construction, and they’re appealing to millennials. Here’s the site’s top five and some of the reasons they made the list:
Lakeland, Florida: A strong job market, restaurants, and nightlife you’d expect from a bigger city, good public schools, and affordable homes make Lakeland appealing to young families.
Grand Rapids, Michigan: With more than 50 lakes and four rivers, Grand Rapids is a fishing and boating mecca. It’s also home to some of the state’s top schools. And it’s one of the more affordable metro areas on the list. Need more? It’s known as Beer City, USA, because of its many microbreweries.
El Paso, Texas: Strong schools, a low forecasted median home, and a melting pot of American and Mexican culture put El Paso on the list. And El Paso rocks—literally—with climbing and other outdoor activities. El Paso has the most affordable forecasted home price of $149,643. (That’s about $110,000 less than the national median.)
Chattanooga, Tennessee: Move over Nashville, Chattanooga has its own busy bar and restaurant scene. And for those who prefer to explore the outdoors, there are mountains and lakes to enjoy.
Phoenix, Arizona: The Phoenix metro area, which encompasses the cities of Phoenix, Mesa, and Scottsdale, is often called the Valley of the Sun, and the warm weather is a top selling point. The area has long been a draw for retirees, but the thriving job market also attracts young professionals.
Other cities on the Realtor.com list include Bridgeport, Connecticut; Las Vegas, Nevada; Boise City, Idaho; Miami, Florida; and Boston, Massachusetts.
The real estate website Trulia came up with its own list of Top Housing Markets to Watch in 2019 based on comparable criteria: job growth, housing supply, starter-home affordability and home searches. The top five on Trulia’s list are Colorado Springs, Colorado; Grand Rapids, Michigan; Jacksonville, Florida; Bakersfield, California; and Austin, Texas.
Zillow’s 2019 Hottest Markets list used similar metrics, including income growth, job opportunities, and low unemployment. It’s top five are San Jose, California; Orlando, Florida; Denver, Colorado; Atlanta, Georgia; and Minneapolis, Minnesota.
If your target area is on one or more of these lists—or if you sense that the city or neighborhood you’re in love with is an emerging real estate market, that could be a good thing or a bad thing.
If you get in before the market is overheated, you may be able to get a great property at a bargain. But if you’re at the tail-end of the trend, you could end up paying much more than you expected or budgeted for.
Playing It Cool in a Hot Market
If you’re relocating for a job or interested in a particular school district, you may not have much choice but to dive into that particular market, or you could rent instead.
Here are some ideas you could consider if you think you might end up buying in a hot market:
Doing Some Research
You could scan real estate websites regularly to get an idea of what’s available and how much homes cost in your target area.
Friends, family, and co-workers might have some insights about the pros and cons of their neighborhoods and what homes might be for sale there. You could also find out if there are any up-and-coming neighborhoods near your dream area, where homes might be less expensive.
Working With a Real Estate Agent
A good agent should know the area, may find out about great homes before they hit the listing services, and could help assess listing prices to determine if they’re in line with the market.
Buyers may have to compromise on their wants to get a home that suits their needs. Longing for three bedrooms and two baths? Maybe you could settle for two beds plus a bonus room, or one and a half baths.
Be Ready With Financing
If you’re ready to start some serious house-hunting, you might want to make finding the right lender a priority. Some things to check on could include the speed of the approval process, what types of mortgage loans and rates are offered, and how quickly and easily the process will go.
Having a loan preapproval from a lender lets buyers know how much they can spend on a home, and it can show a seller the buyer is qualified for the price they’re asking.
Buying in a hot market comes with an extra set of challenges for homebuyers, but with proper preparation—and a lot of patience—those issues don’t have to come between you and your dream home.
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