I know you have answered this question before, however I would love to hear your answer—so hopefully I’ll be the one to ask it this year. What are your real estate market predictions for 2018? I’ve seen several news stories throughout the year that new construction in the valley appears to be booming. Do you think it will continue in 2018? What other market trends do you think we’ll see?
Cheers to the New Year!
Doug, Grand Junction
Cheers to the New Year is absolutely right, but also cheers to last year! 2017 was the best real estate year we have seen (in number of sales and total sales volume) since 2008! It is hard to believe that 2008 is nearly 10 years in the rear view mirror…I remember in 2010 lying awake at night and wondering if the misery would ever end, but end it did and the future of the Grand Valley is bright!
A quick recap. In 2017 we consistently saw sizeable market gains (price increases) and low inventory levels in the under $350k housing market and much of this upward push was driven by new construction. When all the final numbers come in, we will see construction numbers come in at least 30% higher than last year and the majority of the new homes being built are in that under $300,000 price range. Don’t be led to believe that all the partying was done under $350,000, we even had some fair to modest gains in the higher end homes (those between $400-$700k). The inventory of homes over $700k is still moving slow with few buyers really working those upper end price points. Keep in mind that I believe there is a “trickle up” effect in our housing market, meaning as our market gains strength in the lower end price ranges it will slowly build up the higher priced homes over time. The upper end will come back, but only as the strength in the market is built and sustained from the bottom up. We also saw the demand for investment properties, residential or commercial, really build some solid momentum and this segment continues to remain very active with good properties in high demand.
In 2018 I believe…
- We will continue to see the entry level price ranges (under $300,000) remain very strong with low inventory levels that require buyers to be very aggressive and competitive when buying. This segment of the market will remain strong as our jobs and wages fuel these entry level price points.
- We will see the upper end home market continue to post modest increases and gain incremental sales growth year over year. As more people move in from booming markets, they will be willing to open up their pocketbooks for nicer, more expensive homes.
- We will see new construction play a larger part in the market as we are on the cusp of having a robust inventory of lots. These lots will emerge from the development process between July of 2018 and July of 2019. While lots are hard to find now, choice will soon be much more plentiful with ample choices for buyers. I believe this will lead to a leveling off of lot prices and hopefully will open up some new home opportunities below $200,000. We need more affordable housing options.
- We will see the demand for investment properties remain strong! As the stock market surges to a new record level every month, many investors will seek a safer haven and I believe that safer haven will be real estate.
- We will see interest rates climb a little, but will still be between 4.5 & 4.75% by year's end and have little to no impact on the housing market.
- We will see that the secret of the Western Slope is getting out. Our area is going to get more and more popular! As big cities boom and people become exhausted with all that large metro areas entail, the lure and appeal of a slower pace of life paired with an incredible outdoor lifestyle will prove too attractive for many to pass up. Like in the movie Field of Dreams, build it and they will come…trust me, they will come!
I realize I am not stepping out on a very high ledge, but ultimately I believe our immediate future (baring some unforeseen world event) is very bright! We are blessed to live in one of the best places I have ever been. Every time I go on vacation to somewhere “amazing”, I come home and realize that we live somewhere “amazing”. The word is getting out. Buckle up and enjoy the ride!
Happy New Year,