| Next year’s housing market is will largely be defined by continued demand for homeownership, tax reform’s effect on affordability and low inventory, according to Redfin’s predictions for 2018.
Redfin chief economist Dr. Nela Richardson said in a statement that she expects the 2018 housing market to be the fastest on record, with 30 percent of homes that sell next year going under contract within two weeks, up from 25 percent in 2017.
Some of Redfin’s predictions for 2018:
- Fewer homeowners will sell due to new residency requirements in tax reform bills.
- Homes will sell faster than ever; up to 30 percent will sell within two weeks.
- There will be no price bubbles, even in the hottest markets.
Redfin analysts do not expect bubbles to form in any markets in 2018 for two reasons:
- Buyers and sellers remain on the same page when it comes to price, with a sale-to-list ratio at 100 percent or above in the most expensive West Coast markets this year.
- In West Coast metros where prices have now surpassed their 2006 peak, homebuyer debt has declined.
“Inventory is expected to be the major factor shaping the 2018 housing market, but that’s nothing new,” Richardson said in a statement. “For the third year in a row, the nationwide inventory shortage is likely to continue to hinder sales and increase prices. We expect small increases in inventory at the high end of the market by year-end. Starter-home inventory has not increased meaningfully since 2011, and we don’t expect it to increase at all next year. Exacerbating the problem is high rents and vacation home rental platforms that make it both easy and lucrative to own more than one home.”
