For the We Buy Houses® 2018 Housing Report, we asked 41 of our local We Buy Houses® office owners (experienced residential real estate investors) in 33 markets around the country about their sentiment regarding their local housing market for the coming year. Specifically, we asked 5 questions:
1) In 2018, will it be a SELLER’S or BUYER’S MARKET (or EVEN) in your area? 2) HOME PRICES – going up, down or about the same as 2017? 3) INVENTORY OF EXISTING HOMES FOR SALE – going up, down or about the same? 4) CONTRACTOR COST (LABOR) – going up, down or about the same? 5) MATERIAL COST – going up, down or about the same?
According to the local market real estate experts at We Buy Houses®, 2018 will continue to be a “Seller’s Market” in over 70% of suburban markets in the U.S., with slightly less than 10% predicting that it will a “Buyer’s Market” next year.
Home prices are expected to rise again in over 60% of U.S. markets, and expected to stay about the same in over 34%. Our experts expect there to be lower inventory in over 31% of local markets, with inventory increasing in only about 22% of markets next year.
Regarding the costs for renovation, We Buy Houses® local market representatives expect the cost of contractors (labor) to rise in 48% of markets and stay about the same in another 48% of our areas, leaving only a few percent of our markets in which cost of labor is expected to decrease. The cost of materials is expected to rise again in 49% of U.S. markets and stay about the same as last year in the other 51%. There were no respondents that expect material costs to decrease next year.
Conclusion: It’s a Seller’s Market again for most local markets in 2018. We Buy Houses® expects home prices to rise 4% to 8% in major suburban markets in 2018, with a median increase of 5.5% We expect the median price of homes to rise from $248,000 in December 2017 to $262,000 by the end of this year.
We Buy Houses® local market experts in the northeastern U.S. expect a Seller’s Market again with along with rising prices, with all other factors (housing inventory, cost of labor, cost of materials) being about the same as 2017. We Buy Houses® names Washington, D.C the hottest market in the Northeast in 2018.
In the southeastern markets, we expect a Seller’s Market with rising home prices and increasing cost of materials. Inventory will remain tight and cost of labor will be about the same as 2017. The Florida area was hit by hurricane Irma in 2017, which has contributed to an increase in material costs at the onset of 2018. The “HOTTEST” We Buy Houses® market in the Southeast in 2018 is expected to be Charlotte, N.C.
The southern region of the U.S. is likely the “hottest” of the four regions identified by We Buy Houses® and it will be a Seller’s Market in 2018. Our local market experts are expecting home prices to rise along with the cost of labor and materials, in part due to the residual effects of Hurricane Harvey in 2017. Inventory is expected to remain about the same as 2017, a year in which housing inventory in the South was very tight. The “HOTTEST” We Buy Houses® market in the South in 2018 is expected to be Memphis, TN. (However, Waco, TX emerged as one of the most attractive and productive markets in the We Buy Houses® system in 2017, perhaps due to the popularity the area has received from the HGTV show “Fixer Upper”).
The western U.S. is the most competitive region for our professional real estate investors and it will definitely be a Seller’s Market again in 2018. Prices in prime suburban markets in the west – such as San Diego, CA and Colorado Springs, CO – will continue to rise in 2018 as inventories remain very constrained. We expect the cost of labor and materials to be about the same as in 2017. The “HOTTEST” We Buy Houses® market in the West in 2018 is expected to be Seattle, WA.