With the first half of 2019 on the books, this year’s difference makers will play all four quarters, making every day count.  Below are some key elements in why this second half of the year offers an incredible opportunity for success:

Supply and Demand

Supply in most of our markets remains low, with multiple offers being more of the norm.  In a recent NAR survey, 46% of homeowners responded that they are optimistic about selling.  This is up from 37% in the first quarter. The reason being, most believe home appreciation has slowed.  In the same survey, 65% are optimistic about buying with 38% believing that now is an ideal time.  This survey suggests there will be more inventory entering the market with demand remaining strong.

Interest Rates

Since December 2015, the Federal Reserve has raised short term interest rates nine times, which should have resulted in the 30 year rate rising.  This has actually resulted in interest rates decreasing.  The rate quotes on October 19, 2018 for the 30 year conforming and the 30 year high balance was 5%, with the FHA and VA at 4.75%. The Mortgage Bankers Association, the National Association of Realtors and Freddie Mac all predicted rates would be between 5.1 % to 5.4% by the end of 2019.  Today, the interest rate on a 30 year conforming and 30 year high balance is 3.875% and the 30 year FHA and VA is 3.5%. Considering a $500,000 mortgage paid over 30 years, the difference between a 4% interest rate and 5% is $106,932. And, lower interest rates results in buyer(s) qualifying for more.

Employment

With the national unemployment rate at 3.7% and local unemployment rates ranging from 2.1% to 2.9%, our area is considered to be in the full employment status. Until recently, the last time the unemployment rate was lower than 3.7% was 1969.  The Organization for Economic Co-operation and Development (OECD) gives an estimate of the “full-employment unemployment rate” of 4% to 6.4%.

Housing Affordability Index

The Housing Affordability Index is currently at 152.3%, meaning the median household has 152.3% of the income needed to purchase a median priced home.  Put simply, the current median family income is strong enough to purchase one and a half homes.

We are the experts in residential real estate and should be the information source for our clients. Our clients count on us to assess the market and provide sound advice, empowering them to make informed real estate decisions. Those that are proactive, practice our profession in this manner and have real estate business conversations with their clients, reap huge benefit and become an essential part of their clients’ generational wealth building plan (resulting in many additional transactions).  They earn the professional respect similar to that of financial advisors, accountants and wealth coaches.

Because of the dip in interest rates, the second half of 2019 will provide a unique opportunity in residential real estate.  Whether you are a first time buyer, move up buyer, plan on downsizing, or a real estate investor, you can make your move now and lock in a 30 year interest rate at 4% or lower, creating huge future savings.In our industry, best in service involves industry wisdom, experience and strategy.  Take action, and communicate to your Sphere of Influence (SOI) that our housing market is strong with low supplies, low interest rates, strong employment and income.