As we head into the 2nd half of 2018 in this incredibly robust real estate market, it's time to make a few predictions for what will happen in the balance of the year. While I don't have a crystal ball, I do study the market every day, including subscribing to several national real estate reporting publications. So here's what I see:
- Inventory, while remaining low, will increase in the 2nd half of 2018
- Interest rates will rise a bit more
- Market activity will slow down dramatically in late October, as is often the case in election years
- Days on Market will continue to rise nationally (current on average 72 DOM, much less in the bay area), which will cause
- Prices to flatten out (as opposed to the 5-10% appreciation we had the 1st half of 2018)
- However, prices of new homes will continue to rise in Livermore (due to increasing costs to builders)
What does all this mean for the value of your home? Are we about to hit the peak and head for another collapse, similar to 2009? Yes and no - we are likely near the peak now, but (and it's a BIG BUTT) rather than crash down like in 2009, my guess is the market will flatten out, not drop like a rock. The market dynamics are very different than in 2009, when LOTS of recent buyers were underwater as soon as home prices stopped increasing.
For sellers, NOW may be the best time to sell - sure, prices may continue to go up a bit, or rising interest rates could make homes more expensive for buyers, so that's a risk. And for buyers, don't wait to buy - buy and then wait, as real estate LONG TERM is best avenue to wealth.