2019 Real Estate Market Analysis | Collins Group Realty Results_Market Report 2019 | Page 6

2019 MARKET ANALYSIS STEERING FACTORS The following are the key factors that we expect to steer and guide the market as we watch 2019 unfold: Downsizing These markets have recovered well beyond their previous market-peaks of 2007-2008, yet most are showing signs of a “shift” away from what has been a long-standing seller’s market. Buy vs. Rent This trend is in full-swing across a surprisingly broad age range as the merits of efficient, less-maintenance living are being realized by empty-nesters and retirees ages 50 and up. For many, it’s the most critical move of their lives, and we expect to see this drive a high volume of transactions in the 2019 marketplace. Increases in long-term rentals have pushed the pendulum of the buy/rent debate into the favor of buying, creating a new wave of first-time homebuyers into our marketplace. Buoyed by attractive interest rates and an overall increase in the desire for home-ownership, we look for this important buyer demographic to be especially active in 2019. Condition, Condition, Condition , Interest Rates While HGTV has shown the way to creative renovation trends, many buyers in the Lowcountry market seem to be hesitant to take on a large renovation project. As such, properties that are new, newer, or recently renovated are capturing a lot of buyer attention, often commanding a premium in pricing. Likewise, properties that are in need of varying levels of updating could require a thoughtful strategy regarding condition and pricing in order to navigate the marketing and sale process successfully. Listing Volume It’s fascinating to consider that, for the most part, Millennials have never known interest rates to be over 5%, while many others can recall the 30-year rate being as high as the upper- teens. That said, bank-money is still relatively affordable, and even though we expect to see rates continue to fluctuate throughout 2019, this shouldn't be a major steering factor in the market. 2019 Interest Rate Predictions* Look for 2019 to be a robust year for new listings to hit the market due to overall improved market conditions, an increase in local-moves, as well as an uptick in retirees relocating out of the area to be closer to family, avoid storm- related hassles, etc. Feeder Markets The health of the Lowcountry market (especially second- homes and rental properties) depends greatly on the sense of wealth felt by buyers that originate from our primary feeder markets of which the current Top 10 are: TOP TEN { Origination Markets of Online Buyer Prospects New York Charlotte Atlanta Raleigh Chicago Washington, DC Nashville Orlando Boston Columbus Are We Approaching a Recession? Generally defined as two successive quarters of economic decline, a recession is often viewed as a necessary correction. In short, economic growth cannot continue unchecked, so it’s reasonable to anticipate a correction - perhaps in 2020- 21. The key difference, however, is that we don’t expect the next recession to create another housing crash like the country (and Lowcountry) experienced in 2008. Amended lending guidelines, more conservative buying/investing, heightened home equity levels, and greater overall stability in the housing market should go a long way to help keep any significant housing crash at bay. *Interest Rate Prediction provided by Keeping Current Matters