By Sam Mayo, Associate Broker
General Manager, Williamsburg Realty
Optimism is the key word when the chief economists from the National Association of REALTORS® (NAR) and Virginia REALTORS® (VR), the statewide association, talk about home ownership in 2019.
That’s good news for property owners and those wishing to become homeowners this year.
Homeowners always hope their property is maintaining or improving in value. A home’s worth is frequently a hot topic when folks gather in neighborhood get-togethers. The sales price of a home sold recently in their neighborhood is always interesting to know, especially when a homeowner is thinking of moving up, downsizing, relocating, or remodeling.
While no one can claim to know what the future holds in the housing market, it is good to know that the industry’s top economists, who rely on past performance to predict future trends, believe there is enough supporting data to feel optimistic about the coming year. No one wants a repeat of the “Great Housing Recession” that took place almost a decade ago.
Lawrence Yun, chief economist for NAR, says while comparing 2018 to the present “interest rates are lower now than they were in October and November (of 2018) and they are likely to remain that way in 2019. The government shutdown got a lot of attention, but we have learned from polling many REALTORS® that it did not seem to have a long-lasting effect on the housing market at the end the year.”
Rising interest rates in actions taken by the Federal Reserve did have a negative impact in 2018. Housing affordability has been a factor in recent years.
“Wage growth has not kept up with home prices in some parts of the country,” he added, especially noting California and some areas in the East. “And that factor remains the same today. The good news is that the Fed is taking a more conservative approach to raising the interest rate in 2019.”
Interest rate stability always has a positive impact. Improving job market statistics also mean more people are working and that usually results in a growing interest in the possibility of home ownership. The number of homes for sale around the country is also increasing, providing buyers more choices.
But as the saying goes, “all real estate is local.” While the national picture is obviously important, most want to know what’s going on “around town.”
Even though more homes are coming into the marketplace in Hampton Roads, the supply of homes in Northern Virginia remains tight. Williamsburg and its historic Virginia Peninsula neighbors continue to show growth in the housing market with house prices inching up on many fronts. It is a trend that has been occurring for about half a decade.
A report provided through the office of VR economist Lisa Sturtevant says “while the pace of sales activity was down in 2018, home prices continued to rise. The consistent price growth is driven by a combination of factors, including low inventory, strong growth in the state, historically low unemployment, and rising consumer confidence.”
In short, Virginia remains a good place to live and work. While there is always a degree of uncertainty when it comes to economic fundamentals on the state and federal level, the report points out that the outlook for Virginia’s 2019 housing market is positive.