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Mike Stott’s 2018 Real Estate Predictions

I predict that 2018 will generate more money for real estate agents than ever before.  Low-interest rates, consumer confidence, pent-up demand, and higher prices will create the most commissions paid. I predict it will still be more expensive to rent than own in most areas of the country. Use this fact and know your numbers.  


Mortgage Rates will rise to somewhere right around 5% – still historically very affordable money! Don’t worry about this affecting your sales until the rates rise above 6%.


Nationwide the number of Transactions will hit 5.67 Million or so – among the best three years ever in real estate and with our higher prices it will be the best year dollar volume wise.  Nationwide the prices have risen 6% in 2015 to $227,100, 6% in 2016 to $235,200, and 4% in 2017 to $245,000.  Expect a 2.5%to 3.0% increase in 2018 to $252,500.


Since 2011 prices are up 45% – it has been a drama-less boom. Especially when compared to the stress of the market from 1997 to 2006 and 2006 to 2011/2012. With my prediction of prices rising even further I’m forecasting that our coaching clients will have their best year so far in real estate.


Don’t worry about the market collapsing.  We are not out of control.  Nationwide this is not a Bubble. Fewer people are upside-down, there is no junk money out there, and inventory is very, very tight.  We have the same number of homes for sale as we had in 1994 and 63,000,000 more Americans! In 2018 I predict that first-time buyers will pick up dramatically. And this will cause more trade-up sales.


New construction is up almost 10%.  However the 50-year average has been 1.2 million homes – we are not able to keep up with demand. Labor and supply costs force the builders to build more expensive homes.  My prediction is that homes priced below the median price in your market will appreciate much more than the 3% predicted above.


As entry-level home prices rise and interest rates increase I’m guessing “Affordability” will grow as an issue towards the end of the year.  Look for the press to catch onto this in our third quarter of 2018.


This is our normal market.  Enjoy it and consider stopping or not starting to buy leads.  I predict many “new sources” will start asking for your advertising dollars. Since we can’t compete in web traffic lead generation (we simply don’t have the resources that Redfin, Zillow, and Trulia, etc. have) we must compete on service to the people who know and trust us to grow our market share.  These salespeople will sound convincing, be prepared to say “no.”  See how they handle “I am happy to pay a 25% referral for any leads you send me that close.”  Good agents who know how to educate and service their past clients and centers of influence will get a bigger piece of the pie.


Millennials have $41,200 in Student loan debt on the average – and make $38,800. Their job advancement is slower also. Inventory for entry-level housing is extremely low. As a result, they need to hear more from us about the advantages of owning versus renting. I predict you’ll see lots of information on how to work with Millennials.  Teach them about FHA and other low down-payment options. You will need to show them amenity-rich neighborhoods and complexes. Millennials buying will allow sellers to trade up; which helps the entire market.  Go after this market segment.


In expensive areas, the December 2017 tax bill will have big consequences. I’m guessing home prices may drop measurably in our more expensive markets. Because of the new lower limit on the mortgage interest deduction ($750,000 versus $1,000,000) and the reduction (to $10,000) in being able to deduct state and property taxes.  

Coach Mike Stott

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