Trends to Watch in 2018 at Reflections
2018 will officially be known as a year of change for the Twin Cities real estate market. That of course means Reflections will be experiencing some changes. Although I still believe we are one of the premier condominiums south of the cities, we need to be prepared for some changes going forward. Below is a detailed explanation of some trends that are expected to emerge this year.
- Inventory Will Increase:
Residents looking to sell their units have been spoiled over the last few years as we've experienced record low inventories matched with increasing prices. Realtor.com projects US year-over-year inventory growth to trend into positive territory by fall of 2018. March is estimated to show a 4% decline before tapering off come summer. This increase of course will come after the peak home buying summer season.
What does this mean for Reflections and your home? It means that if you're considering a move, now is the time to consider selling. We have reached the peak that our units are going sell for statistically. We are up about 12-15% from last year (according to prices pulled from the MLS). That is incredible growth in one year for any investment!
I still believe we have the spring and summer to get the most out of our units. Around the end of August is when we will see the uptick in inventory, mortgage rates (already up to 4.6% a week ago), and increasing pressure from other areas inventories.
- Rising Prices Will Slow Down:
Our 12-15% growth of the last few years is unsustainable. National home prices are forecasted to slow from 5.5% in 2017 to 3.2% in 2018. When you couple that with rising mortgage rates and our niche specialty (affordable high end condos with easy access to the cities), you're left with increased pressure on our units value.
- New Apartments:
We face one more challenge that's taking shape in our backyard (literally). The proposed new apartments will bring in more competition for buyers in our area. Being the first person to live in a brand new state of the art apartment is enticing for any person. Reflections is getting older and we don't have the amenities of the newer apartments such as Indigo. We had a solid foothold when we were the only available "state of the art" living in this area. That is no longer the case and could be the factor that makes someone rent instead of buy.
- Millennials Buying More Homes:
The one thing that could work in dampening the inventory increase and price corrections are Millenials. Millennials are expected to continue facing challenges with mortgages and home prices, but they also are predicted to reach 43% of homebuyers by the end of 2018. This means that we could and should start including marketing focused on younger buyers who are interested in low maintenance home ownership. I have a detailed marketing strategy that can be discussed if you choose to sell your home.
In conclusion, I do think we're at or near our top home values for Reflections. That shouldn't be a scary idea though because of a few reasons.
- We still have the spring and summer to capitalize on those prices.
- A stable market means we won't see another crash like in 2007/2008.
- We still hold a prime location.
- Our HOA is VERY well funded.
- We have one of the best communities!
The market will adjust over 2018 and we will see a stable market which will be good for us in the long run. It will avoid the bubble effect and help keep our condominium strong.
If you are considering selling this year, please give me a call so we can discuss the best selling strategy so you can capitalize on the peak values. I am always here for any questions and provide 100% free/no obligation value reports on your unit.