Toronto Real Estate Forecast 2018 – 2019

Toronto Real Estate Market Forecast/Predictions to 2020

May 19, 2018. TREB reports another flat month in sales in the  Toronto housing market.  Sales shrank 1.2% and average home prices dropped only .2% during April.

If not for the Toronto Condo market, the Toronto housing market would be wheeled  into the critical care unit. What some are called a balanced market are twisting words about as far as they can be contorted.

You’ve seen the same discouraging stats for many months now. Nothing new. Perhaps it’s time to look at what’s wrong with this market and why Toronto housing crash is being uttered more and more.

Election 2018 – No Help for Housing?

The latest TREB report however was overshadowed by the bomb dropped by Doug Ford, leader of the PC party. Ford  suddenly recanted his promise to increase housing development and construction to help with the housing crisis. Voters were praying for relief and now it’s uncertain who will win this coming election. Political leadership in Ontario is a big negative for buyers and investors.

Since Toronto is slated to be a global supercity with a big increase in population, any land restrictions and red tape are serious issues. Right now buyers aren’t buying (house sales down 5%) and sellers aren’t selling (nowhere to go) so it’s a Mexican standoff during what should be a hot sales period.

It’s another indication that housing in Toronto is solely a political issue. Ontario’s election day is June 7th and this will put the Toronto housing conflict to rest either way. Yesterday’s news should be a boost for the Toronto condo market.




Toronto’s Insatiable Appetite for Money

Recent reports have it that the City of Toronto could face a $1.4 billion deficit, due to the loss of the lucrative land transfer taxes. Toronto’s starry eyed spending may have to be reeled in thus adding to a cascading recession threat.

A lot of Toronto home buyers are likely cheering the price falls and this spring might be the lowest price point as we head into provincial elections in 2 months and the settling of the NAFTA trade disagreement. Homeowners may decide to hold onto their homes and wait for prices to return after the upcoming provincial election.

For the march report, TREB focused solely on the YoY losses and it is ramping up its election time rhetoric regarding the responsibility of government to foster a healthy housing market. They also believe sales will pick up this summer (post election) but didn’t offer a spring forecast.

Other than stats which you’ll see below, what are the real issues for the GTA market? TREB suggest interest rates and mortgage rules are disouraging home sales. Yet, condo and apartment sales are still strong.

When will prices bottom out? May, June, or next October?

A Change is Coming for Ontario

The real matter for Toronto prices and sales is psychological because the economy is uncertain. Home prices are trending downward strongly, NAFTA is troubled, world leaders are threatening trade tariffs, and the provincial election is coming.

Ontario’s provincial taxes have become crushing and the Liberals have shown no mercy. You have to be genius if you want to be a successful business person here. Yes we’re aging here in Ontario but there’s incredible intellectual capital that’s being wasted. We’ll see more people leave the province even with a new government.

The death throes of the Wynne government show that the people and the business sector can’t tolerate this behaviour and that a new, fresh attitude toward open markets and small business success must happen. If small business is represented in the NAFTA agreement, it could give Ontario a boost it has never seen before.

As Kathllen Wynne’s MPs give up, the wave for the PCs and Doug Ford grows. Screen cap courtesy of Vice.com and CBC

No one can predict what incoming Premier Doug Ford is going to do. Will he toss the market a parachute, open up development and then delete the repressive taxes? We sure hope so. The results for the economy will make news across the and we’ll go from laughing stock to free market leaders.

After the Storm

During uncertain times, buyers will not stick their neck out to purchase a  high priced home in a market rated as the most likely to crash. And theTSX? It’s been the worst performing stock market in the world for some time now. But that could change.

Home prices in Toronto actually rose, yet prices in Newmarket, Aurora, Richmond Hill, and Bradford declined strongly again.

TREB Outlook

TREB reiterated its belief in the role of housing and real estate sales in its yearly report . TREB suggests the GTA market is a key to economic health in Ontario.

On average, each residential transaction reported through TREB’s MLS® System in the GTA generates $68,275 in spin-off expenditures, … The real estate industry is a key contributor to our economy, with total annual spin-off expenditures close to $7 billion.

They went further to hint that without real estate sales and the taxes it generates, the government will have to get their tax money elsewhere! Voters may not want to hear that and it’s probably something Doug Ford will jump on to put the finishing nails in Kathleen Wynne’s guilded coffin. I’m sure HGTV will want to support the pro-development initiatives??

Wynne has killed the Toronto housing market, tax base, young people’s dreams, and as an election promise, is offering free day care, which the government will have to borrow to pay for. Wynne’s passing will generate a wave of relief which Doug Ford will surf on for many years.  With a few legislative changes, he could relaunch Ontario’s economy and the Toronto real estate sector.

The March 2018 TREB update reveals the damage to what should have been a strong and vital Toronto real estate market.

Screen capture courtesy of TREBhome.com

Toronto Forecast for 2018

What as the Toronto Real Estate forecast for 2018?  A gloomy winter/spring followed by lots of sunshine in June. All we need is the June sunshine and we got it 100% right.

Why so optimistic against all the negative reports coming out? None of them are accounting for the upcoming election in Ontario.  It’s to soon to celebrate but only 2 short months away, and we may see the boom I sort of suggested might happen:)

This chart from TREB shows the market 2 months ago in January. Numbers of house sales rose last month yet cond sales fell.  Notice condo prices are up $43,000 in March vs January. Keep an eye on the Toronto condo market.




The market in the GTA seems very quiet right now, and as Benjamin Tal, CIBC’s chief economist said, “This is the most significant test the market has seen in recent years.”




Is this the best time to buy a house in Toronto? The answer to that may be yes. Prices keep rising despite governments attempt to throttle it. On June 7th, Ontarians will get their chance to speak.

Selling your home in 2018?  Should you sell your home and upgrade to a roomier one? Or perhaps you’ll be downsizing to a condo?  Condo sales boomed in 2017 and you’ll be competing hard for anything under $600k. Your Realtor will likely have to work a sophisticated marketing strategy to help you get your house sold and get you moved into a better one.

Are you a 25 to 35 year old first time buyer and hoping to buy a condo?  Is this the best time to buy a home? See the Toronto condo market forecast for prices and opportunities.




Is it a good time to buy a condo apartment in Toronto? Which are the best neighborhoods to buy one? Check the Toronto condo market page for insight.

If you’re looking solely for home prices, then see the detailed running home price stats for each town and district. This post has a collection of videos, opinion, stats, charts, of historic sales/prices and current stats to help you with the decision of whether to buy or sell.

The most meaningful Toronto housing market prediction: After a short depressed period this spring, there will be a fast growing increase lead by optimism with the new incoming Ontario government in July. The prediction is that the optimism of the new government will keep buyers and sellers optimistic until July.

With immigration high (300k new Canadians each year), migrants from other parts of Canada increasing, birth rates up, and Ontarian’s expectations optimistic, 2018, 2019 and 2020 will see strong demand for most properties. As you can see in the Toronto market stats below, some towns and districts in the GTA have seen very strong price growth.

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Anyone buying or selling should have the best overview of factors.

 

Teranet Home Prices

Teranet released its market report on home prices in Toronto, Vancouver, Calgary and other Canadian cities and predictably we saw the final burst of buying before the stress test rules came into play.




Toronto Real Estate December Report

What happened in December 2017: listings up 50% but sales down despite the last minute stress test frenzy.  New housing starts dropped by 33,000 overall in Ontario in December, after a record amount built in November.  Condo apartments and townhouses are all the rage, due to the almost affordable prices.

This recent chart from TREB shown below, reveals prices are still up year over year.

 

 

Check the running Toronto home prices chart down below. Leave a comment below.

In December, the MLS® Home Price Index (HPI) Composite Benchmark was up by 7.2% over last year, and the overall average selling price was up by 0.7% year over year. — from TREB report.




Check out the Vancouver and Calgary forecasts too as it reflects on Toronto (And Share on Facebook!).




You Can’t be Serious! a Housing Boom in Toronto in 2018/2019? Royal Lepage predicts prices will rise 6.8% or $57,000. Only Las Vegas Nevada is forecast to be higher. With new homes sold and new development halted, supply won’t be sufficient in late 2018 or 2019. Speculators will love that scenario.

Royal Lepage predicts continued price rises even as domestic investors shift to apartments and condos.

Condo Prices Rose 23%

And the danger in the condo market might be the depressing effect of rental controls on new condo builds. As supply dwindles, prices and rents will rise which is positive for condo investors. The average rental price for a 3 bedroom condo in Toronto is now $3461 per month.

Condo prices were up 21% year over year in December.

Detached Home Prices in many Treb districts has plummeted from 18 months. In some cases, prices are down almost 50% as you can see in the charts below.



If the Toronto Real Estate market nosedives in January 2018, it will be interesting to see what impact it has on the Ontario economy as well as the Canadian economic forecast.

While the talk was about rocketing house prices in Toronto, the Toronto condo market is doing okay and the demand for new construction condos is still brisk.

1 Million New Immigrants Will Affect Toronto’s Housing Market Demand

Demand is never ending, in fact PM Justin Trudeau just announced a program to being in 1 million new immigrants over the next 3 years  along with a new national housing program to help with the housing availability crisis which will heat up demand and prices for Toronto apartment rentals.

So while the Ontario and Federal governments play a dangerous game of economic Russian roulette and await their political fate, homebuyers may be finding their homownership dream more distant than ever. It’s certainly not a good time for the homeless in Toront and area with the wicked cold snap coming through.

Will it be crash and burn in Toronto this year? Even the slightest economic slide in Canada could send nasty shockwaves through the housing market. Crashes normally happen after the euphoria period. Despite the government’s negativity toward home development and supply, the market should be good for 2018.

You can view the prices for each city and MLS district below.




TD Bank senior economist Michael Dolega is quoted last month as saying  the market looks good “after some near-term weakness, likely to last into mid-2018, activity should begin to rebound thereafter given the fundamentally supported demand related to strong job growth and strengthening wage dynamics.”

The upcoming mortgage changes in January means buyers are putting rush orders in now. Condos below $500k are selling well and will continue to do in 2018.  The key for Realtors is helping buyers find an affordable condo, or a house with rental income potential.



Rental Income Investment Property

Some smart buyers are looking at financing solutions that give them a shot at rental income. Real estate investors in Toronto, Vancouver and  even Calgary are focused on rental income investment properties. You should be too.

What is the most notable change? It would have to be Toronto condos. Sales dropped by 15% yet condo prices rose by 23% across the GTA.  When the selection of lower priced condos are gone, we’ll see a renewed surge in prices as buyers hunt the luxury market to see what they can get.

Rental prices are skyrocketing as rental apartments dry up because of the rental price controls.  Rents were up 12% more in the 3rd quarter. How much further will Toronto condos climb in price and how long will voters, many of whom are home buyering milennials with nowhere to go, tolerate Wynne and Trudeau?



Are you considering using a HELOC to do a house renovation?  With listings up, you’ll have to have to add some value to get your house sold. An educated Realtor might be a wise hire too.

Bookmark this page as it is updated very frequently.

Normally Toronto house prices slide back during the winter.  That could help solve the afforable housing issue.  Yet the market is 2 tiered – young buyers with limited financing and a rising group of detached houses that are well out of their reach. 2018 should be the year of the condo.  Contrast the Toronto market with the Calgary Housing Forecast for greater investment insight.

November 2017 TREB Market Update with Jason Mercer






Considering buying or selling? Take a look at some of home buying tips and home pricing tips posts and this new post on the best renovations to grow the price of your house for saleFirst Time buyers should remember that house prices always climb even through recessions as you’ll see in the graphics and housing data below.

Some recent reports from Toronto realtors have it that buyers are back in the market this fall, yet there aren’t enough listings. They feel Toronto House prices will rise again. However, buyers are probably gleeful at the drop in house prices over the last 5 months. If it continues, they might be able to find a great buy. The Toronto economy could boom for sometime if NAFTA is unaffected, yet CMHC beleives there are dangers lurking for this market.

New sales data from TREB’s Marketwatch report paints a telling story of what happened in Toronto Real Estate in the summer of 2017 and how 2018/2019 might look.  Buyers and sellers are wondering if the Toronto housing picture will mirror the Vancouver real estate forecast where Vancouver condos are king.  Vancouver seems to have held its own which means the Toronto market might be safe too.  Let’s not kid ourselves. A crash or a housing slide in Toronto remains a possibility (government).

Consider this your most up to date report on the Toronto Real Estate Market – lots of food for thought below. Enjoy the monthly price charts below which may help you decide whether it’s time to sell your house.  Also see the Mississauga real estate forecast if you’re out in Mississauga, Milton, Oakville or Brampton.

Do you know anyone who may be buying or selling?

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New Fed mortgage rules and a higher mortgage rate means buyers will need more money down and be forced to pay higher mortgage payments. The OECD and the World Bank are constantly nattering about Canada’s housing issues. What are they seeing that we don’t?

Most experts are calling for flat prices right through 2018, however there is still a lot of unsold new home inventory and governments are clear in their intent to suppress the housing market. Those considering putting up their houses for sale might be acting much sooner.

When Will You Put up your House for Sale?

Before it was all about finding a house for sale, and now there’s lots of houses for sale. It’s almost certain you’re going to get a much lower price for your GTA house in the next 4 months. As mentioned, the PCs will reconsider how the Liberal’s botched the housing crisis and how they might fix it.

That will change the market psychology. As soon as you and other buyers have somehwere to go, you’ll be putting your home up for sale. If you get prepared this winter and spring, you might hit it right before your neighbors sell theirs.

You’ll want to start reading my how to sell your home tips posts and a little on over asking bidding wars because even right now, multiple offers are still common.

The Toronto situation seems to mirror the US housing forecast only with troublesome government meddling in TO. Experts suggest it is government action that causes the markets to suddenly slide out of control.

Toronto Housing Market Predictions from the Experts

Let’s start off with the Swiss Banks review.

Is BNN’s “end of the housing boom” story valid? Does real estate drive employment in Canada?

CMHC keeps the red flag hoisted on real estate

Trump and squashed Canadian exports represent a big worry.




 

New MLS stats from TREB show sales in August dropped 34.8% year over year and the number of new listings on TREB’s MLS® System, at 11,523 which is  6.7 % lower than last year at his time. This is the fewest listings since 2010.  Prices did decline yet are still higher than August of 2016, and did not decrease evenly in all TREB districts.   




While some areas such as the 905 have seen big drops, (houses are sitting and have to be rented now) areas in Toronto have maintained prices.  These neighbourhoods offer a more reliable bet for sustainable property investment value. Many property investors have discovered the hard way, what the word sustainable means in bottom line dollar terms. Because of demand, two hot areas right now are rental property investment and student housing investment.

Adding to the story this month is a higher loonie, higher mortgage rates, foreign buyer withdrawal, new tax on vacant homes, and homebuyers losing interest. And in response, homeowners make a desperate attempt to sell at lower home prices. 

Condos were the Hot Story in Summer 2017

  • condo average price up over half a million dollars
  • condo prices have risen 28% from second quarter of 2016
  • average condo price in Toronto rose to $566,000
  • condo sales volume dropped 8%
  • number of new listings grew only 1%
  • condos in C09 district rose to an average selling price of $1.345 million
  • Condos in C08 and C01 have the highest volume of unit sales and an average price of $603,000 and $627,000 respectively — high volume translates to more availability and lower prices

The Best Toronto Neighbouhoods are Sound for Investment

TREB stats show specific districts or neighbourhoods in Toronto have not seen a price decline and these ones below have seen price increases:

w10 – Rexdale Kipling, West Humber Claireville, Kingsview Village, Vaughan Grove
w09 – Willowridge Martingrove Richview, Humber Heights
w02 – High Park North, Junction Area, Kingsway South
c02 – Annex, University, Yonge St Clair
c04 – Bedford Park, Nortown, Lawrence Park North, Forest Hill North, Lawrence Park South
c12 – Lawrence Park North, St. Andrew Windfields
c13 – Banbury Don Mills, Parkwoods Donalda, Victoria Village
c15 – Bayview Village, Hillcrest Village, Bayview Woods Steeles, Pleasant View
e01 – South Riverdale, North Riverdale, Danforth, Woodbine Corridor
e06 – Oakride, Clarilea Birchmount, Birchcliffe, Cliffside

Many of these Toronto neighbourhoods are in such strategic locations for employment, that given the housing shortage, urban intensification, poor transit and roadways, that the condos and homes in them will never see a significant price drop. The events of the last 3 months with the Liberal’s fair housing act was an acid test. These Toronto neighbourhoods look to be the best neighbourhoods for safe real estate investment.




US investors should continue to follow the Toronto real estate market as the low Canadian dollar continues to create better real estate investment value.

The Toronto Condo market in July on the other hand is active likely due to affordability. Condos are selling well at 2% to 6% over asking price and comprised 91% of all sales. New apartment and stacked townhouse sales grew 89% year over year, compared to a 72% drop in house sales. 

I suspect 2018 will bring moderation given the rhetoric around the NAFTA deal, tighter lending rules, higher loonie, and very high home prices. 

 

Share the December 2017 Stats and Toronto Forecast with your family and friends on Facebook

Almost everyone is interested in the direction of the housing market. It affects the GTA economy, jobs and business oulook.  This page is updated frequently.

 

A Look Back at 6 Months ago: TREB June 2017 Real Estate Report

Highlights from the June TREB market report at the end of the bubble:

  • Sales dropped 37% year over year, on top of May’s whopping 50% dive
  • residential listings were up 16%
  • Prices rose 6.3%
  • The MLS® HPI composite benchmark price up by 25.3% on a year-over-year basis in June
  • Home prices are down 1.1% month to month
  • apartment prices rose 1% month to month (higher rents)

What’s Compelling about the Toronto Housing Market?

Toronto is a high value housing market similar to New York City or the Bay Area of California, and TO is a city destined to be a super city.  It’s unlikely that a property purchase in Toronto will be a disappointment over the long run. If you see the Toronto home price charts, you’ll notice that prices have climbed in the last 18 months. So buyers have not lost their equity.

And detached house prices will rise much further due to a severe housing shortage, improving economy, and rising population. 

Despite the Ontario government’s new foreign buyers tax threat, demand for housing won’t fall. As the loonie falls in value, Toronto home prices turn out to be reasonable internationally, and may be a worthy investment for rising wealthy Americans. Canadian real estate is still a good alternative to US Real Estate in 2018.

While many buyers would like to live in Central Toronto, Oakville and Milton the prices in these cities is prohibitive. Instead, buyers are looking north to Vaughan, Newmarket, Aurora, Bradford, Barrie, Innisfil, and East Gwillimbury.




Please do share this report with anyone you know who might be buying or selling




Toronto MLS Real Estate Board Sales Stats for March 2018

Average Toronto Home Price – Detached Homes TREB – March 2018
City March 2018 December 2017 November 2017 October 2017 September 2017 August 2017 April 2016 Price Change Last 23 months Price Change Last 8 Months
Burlington $993,500 $959,071 $871,879 $895,457 $974,446 $944,564 $961,502 3.3% 5.2%
Halton Hills $852,500 $820,904 $790,683 $787,517 $706,500 $984,812 $828,719 2.9% -13.4%
Milton $868,300 $843,688 $841,998 $884,144 $853,790 $866,650 $765,973 13.4% 0.2%
Oakville $1,298,000 $1,356,888 $1,438,656 $1,482,620 $1,393,860 $1,314,363 $1,191,503 8.9% -1.2%
Brampton $796,600 $763,814 $776,280 $775,170 $766,132 $766,831 $660,015 20.7% 3.9%
Caledon $1,002,000 $1,185,182 $1,001,753 $952,466 $918,712 $1,028,591 $755,494 32.6% -2.6%
Mississauga $1,760,000 $1,140,965 $1,060,211 $1,034,338 $1,023,207 $1,066,015 $966,467 82.1% 65.1%
Toronto West $1,099,000 $1,039,022 $1,016,076 $1,102,379 $1,015,711 $919,916 $944,422 16.4% 19.5%
Toronto Central $2,100,000 $2,070,131 $2,109,070 $2,051,481 $2,302,146 $2,113,130 $1,983,187 5.9% -0.6%
Toronto East $969,000 $894,290 $889,002 $931,239 $961,805 $887,620 $860,814 12.6% 9.2%
Aurora $1,118,500 $1,033,353 $1,249,613 $1,280,888 $1,458,481 $1,144,094 $1,155,487 -3.2% -2.2%
E Gwillimbury $865,000 $769,624 $763,071 $1,013,350 $895,119 $966,047 $764,055 13.2% -10.5%
Georgina $526,700 $619,105 $542,792 $524,735 $600,791 $604,838 $548,886 -4.0% -12.9%
King $1,727,600 $2,129,286 $1,889,738 $1,887,696 $2,252,933 $1,768,333 $1,283,432 34.6% -2.3%
Markham $1,272,600 $1,497,330 $1,342,508 $1,468,221 $1,358,328 $1,319,860 $1,363,887 -6.7% -3.6%
Newmarket $854,600 $879,151 $946,465 $916,350 $895,191 $901,055 $841,593 1.5% -5.2%
Richmond Hill $1,400,000 $1,365,373 $1,526,836 $1,345,898 $1,401,922 $1,466,884 $1,412,443 -0.9% -4.6%
Vaughan $1,238,800 $1,245,480 $1,236,250 $1,280,906 $1,392,781 $1,348,649 $1,191,632 4.0% -8.1%
Whitchurch Stouffville $1,289,000 $970,236 $1,058,486 $928,551 $1,159,545 $1,024,941 $1,048,658 22.9% 25.8%
Ajax $700,000 $690,333 $710,440 $684,011 $696,604 $708,185 $646,370 8.3% -1.2%
Brock $570,800 $408,757 $445,829 $432,318 $513,579 $508,615 $419,758 36.0% 12.2%
Oshawa $559,900 $532,813 $524,422 $516,459 $516,904 $550,677 $467,981 19.6% 1.7%
Pickering $846,000 $812,035 $840,592 $790,733 $869,546 $812,643 $772,399 9.5% 4.1%
Scugog $697,000 $689,250 $726,898 $614,678 $594,062 $719,375 $545,804 27.7% -3.1%
Uxbridge $858,500 $720,557 $771,521 $1,031,295 $957,221 $792,233 $798,749 7.5% 8.4%
Whitby $718,300 $698,110 $669,922 $695,352 $745,222 $733,811 $618,032 16.2% -2.1%
Orangeville $585,500 $562,020 $575,349 $538,518 $594,636 $612,974 $490,825 19.3% -4.5%
Innisfil $644,600 $561,716 $599,443 $525,685 $541,274 $549,492 $476,756 35.2% 17.3%

Stats above courtesy of TREB Market Watch Report

A Look at Detached House Prices in Toronto’s MLS Districts

Toronto House Prices — MLS City Districts Home Price Comparison
TREB District City of Toronto Avg Price December 2017 Avg Price November 2017 Avg Price October 2017 Avg Price Sept Avg Price August Average Price April 2016 Avg Price April 2017 Avg Price Mar 2017 Price Change Since March 2017
Toronto W01 $1,639,475 $1,269,500 $1,709,593 $1,652,600 $1,146,500 $1,405,442 $1,506,333 $1,543,961 6.2%
Toronto W02 $1,403,750 $1,256,500 $1,273,391 $1,280,867 $1,172,250 $1,331,780 $1,538,546 $1,381,945 1.6%
Toronto W03 $701,000 $774,021 $741,391 $771,142 $692,125 $666,904 $854,316 $829,396 -15.5%
Toronto W04 $799,973 $819,469 $840,110 $850,621 $846,775 $786,951 $1,024,908 $1,073,531 -25.5%
Toronto W05 $826,750 $800,063 $874,660 $805,031 $823,767 $749,333 $930,876 $1,073,531 -23.0%
Toronto W06 $1,010,600 $914,017 $922,286 $992,023 $797,392 $795,840 $974,420 $1,128,584 -10.5%
Toronto W07 $1,200,571 $1,086,386 $1,474,725 $1,277,336 $973,250 $1,112,233 $1,484,406 $1,352,042 -11.2%
Toronto W08 $1,317,240 $1,378,995 $1,356,671 $1,247,374 $1,161,882 $1,204,013 $1,544,869 $1,610,163 -18.2%
Toronto W09 $1,005,500 $886,872 $975,778 $922,000 $1,139,211 $839,479 $1,197,627 $1,115,970 -9.9%
Toronto W10 $717,539 $691,261 $688,011 $661,357 $665,268 $613,488 $831,579 $802,909 -10.6%
Toronto C01 $1,412,000 $1,597,750 $1,393,875 $1,430,667 $1,005,000 $1,528,085 $1,646,240 $1,694,333 -16.7%
Toronto C02 $3,730,000 $2,109,010 $2,313,611 $2,242,400 $2,242,750 $1,580,181 $2,710,038 $2,170,853 71.8%
Toronto C03 $1,374,437 $2,327,333 $1,880,584 $1,742,200 $1,317,111 $1,761,787 $2,246,734 $2,473,608 -44.4%
Toronto C04 $2,237,414 $2,204,173 $2,220,546 $2,212,838 $2,200,398 $2,033,140 $2,583,667 $2,245,813 -0.4%
Toronto C06 $1,147,545 $1,293,688 $1,243,727 $1,327,467 $1,445,556 $1,318,750 $1,625,779 $1,811,183 -36.6%
Toronto C07 $1,693,958 $1,609,066 $1,741,987 $1,903,632 $1,776,771 $1,657,822 $2,004,585 $2,155,365 -21.4%
Toronto C09 $2,410,000 $3,538,371 $3,414,450 $2,916,750 $3,500,000 $2,998,401 $3,246,445 $4,481,000 -46.2%
Toronto C10 $2,375,000 $1,856,406 $1,807,154 $1,747,079 $1,473,125 $1,864,333 $1,945,104 $1,786,091 33.0%
Toronto C11 $1,807,500 $2,344,375 $1,895,636 $2,137,000 $1,547,000 $1,542,867 $2,275,117 $2,201,462 -17.9%
Toronto C12 $4,213,580 $3,729,125 $3,775,636 $5,160,518 $3,910,000 $3,141,244 $3,969,281 $4,420,370 -4.7%
Toronto C13 $2,002,400 $1,342,464 $1,520,151 $2,110,709 $1,788,465 $1,926,266 $2,606,111 $2,108,137 -5.0%
Toronto C14 $1,802,222 $2,235,856 $2,001,750 $2,249,879 $3,055,823 $1,996,137 $2,554,047 $2,673,112 -32.6%
Toronto C15 $1,915,292 $1,587,250 $1,944,667 $1,832,921 $1,602,033 $1,766,219 $2,144,120 $2,108,137 -9.1%
Toronto E01 $1,319,250 $1,102,667 $1,135,156 $1,196,542 $1,224,440 $1,164,343 $1,747,894 $1,206,359 9.4%
Toronto E02 $1,188,324 $1,457,515 $1,494,639 $1,625,074 $1,414,357 $1,333,475 $1,458,167 $1,507,090 -21.2%
Toronto E03 $1,008,987 $913,430 $1,023,487 $1,038,377 $956,448 $947,611 $1,099,537 $1,121,847 -10.1%
Toronto E04 $765,124 $777,377 $768,002 $794,523 $772,883 $717,890 $897,304 $889,018 -13.9%
Toronto E05 $929,943 $899,419 $1,019,362 $979,800 $995,190 $991,136 $1,249,824 $1,303,892 -28.7%
Toronto E06 $855,347 $822,917 $766,159 $926,615 $841,995 $766,782 $1,051,918 $1,102,286 -22.4%
Toronto E07 $888,969 $911,018 $897,653 $1,025,444 $922,600 $874,280 $1,164,819 $1,142,611 -22.2%
Toronto E08 $969,634 $930,974 $1,014,526 $852,070 $872,641 $810,560 $1,066,868 $1,092,667 -11.3%
Toronto E09 $752,919 $714,451 $739,871 $690,382 $699,646 $664,378 $855,363 $895,417 -15.9%
Toronto E10 $882,733 $821,381 $897,856 $944,666 $883,852 $821,126 $1,067,925 $1,069,906 -17.5%
Toronto E11 $666,136 794,238 $758,288 $778,100 $780,618 $720,672 $842,414 $851,750 -21.8%

 

Huge new housing developments in Bradford, Newmarket, Aurora, and Vaughan are still selling well, but the market in the 905 area code has cooled. That means bargains are waiting.

Will 2017 Sales in Toronto be a New Record?

2016 was a record year for home sales in Toronto, Mississauga, Vaughan, Newmarket, Bradford and Aurora areas in 2017 could well be even more intense.  

One district in Toronto saw its prices rise $1 million since Sept! See TREB charts below.

TREB forecasted another strong year for home sales via the MLS®.  Their outlook for the Toronto region was 100,000+ home sales for the third consecutive year. Between 104,500 and 115,500 home sales are expected in 2017, with a point forecast of 110,000. TREB’s districts include Mississauga, Oakville, Vaughan, Newmarket, Aurora, Richmond Hill, Markham Bradford, Scarborough, Brampton, Oshawa and Milton.

But what drives the Toronto housing market? Will it succumb to the same fate as Vancouver or worse?   If you’re a buyer, you’re wondering which neighbourhoods and towns to focus on and whether this market will tank. If you’re a seller, you’re wondering if you’re going to miss the biggest payday of your life by not selling. If you’re close to retirement, you may want to carefully review your choice not to sell. 2017 is a grand time for you to sell and move onto a better life.

The 16 Key Factors Driving The 2017 Toronto Housing Market:

  1. severe shortage of housing stock in the GTA region
  2. rising demand from buyers who have been renting
  3. restrictions on development land for housing
  4. Trump and NAFTA free trade deal and implications for Toronto’s automakers
  5. will the low dollar continue?
  6. will oil prices stay at current levels?
  7. rising numbers of millennials hunting for a home or condo
  8. bank of mom and dad continues funding kids home dream
  9. rising interest/mortgage rates
  10. Toronto and Ontario land transfer taxes
  11. rates of employment and income
  12. asian and persian home buyers and investors rush over?
  13. will China curtail its outflow of investment money?
  14. business investment in Ontario continues falling
  15. consumer debt loads and credit ratings
  16. further federal restrictions on first time buyers/downpayments
  17. commuting distances and new construction in York region and Vaughan

 

A look Bak at Toronto Home Prices for June 2017

This graphic courtesy of TREBhome.com illustrates how hot Toronto homes prices had been for each type of housing. (See the Toronto Condo market outlook too).

Sharing is Good for Your Social Health!

The Toronto real estate market is in a precarious state.  Help your friends and contacts who may be wondering if now is the right time to sell, before the housing crash. You can get your price in 2018.




How about the US? Different story for them. The US real estate market is ripe with opportunity with a minimal chance of a housing bubble or crash.

And from this telling graphic above, the shocking rise and fall of detached home prices tells us something is wrong with the Toronto real estate market. Could a Toronto housing crash occur? The renegotiation of the NAFTA deal may be the factor that starts the slide.  President Trump’s goal is US jobs and economic health and he’s already stated he wants a better deal with Canada. It makes sense that he would want auto makers and parts manufacturing to be done in the US. The Canadian dairy and lumber industries are just a distraction.

If there was ever a time to sell your home, this is it. Some have sold $1 Million over Asking.




Investment Rentals are Big Money — How About Rental Income Property?

Are you going to buy rental income property as an investment in 2018?  Check out cities in the US where there is a much better upside in profit. The US economy and housing market will be the top performer in 2017/18.

torontoforsale
Image courtesy of CBC — Hot Toronto Market Means Spending More

What do your realtor and local politicians say is happening in your local market in Toronto, Mississauga, Vaughan, Oakville, and York Region?  What’s their forecast? I’d like to know.

As we progress to 2018, emotions are going to run high as the critical factors you can read about below become intense. Could the Toronto economy collapse if home prices fall 20% (loss of taxes for governments among other fallout).

Below is an updated look at the March real estate market in the GTA. Recent trends show home prices are rising faster than any experts predicted. Will this be the excuse the government is looking for to upend the market? Or is demand for single detached homes simply too strong?

Government Values at Odds with the People and their Pocketbooks

Are the all too predictable actions of governments in Vancouver and Toronto foretelling what may happen in US markets such as Los Angeles, New York, Miami, and San Francisco? Is the battle over and treatment of land in all major urban areas simply an artificial means of inflating real estate prices or is there actually a land crisis?

If the Ontario government decreases available land for development, drives prices way up causing public furor thereby requiring draconian measures, will it end in a crash in late 2017? Will someone create a crisis to force a crash? We should be asking these questions if we’re investing or buying.

Scarcity of land is the primary driver of high prices in the Toronto real estate market. The biggest threat is unwise government manipulation.

BMO’s senior economist Benjamin Tal said in a Toronto Star report on October 14th, the Ontario Government’s Places to Grow program was primarily responsible for the fast rising prices in the GTA market. He also suggests other red tape factors worsened the situation. Prices in Newmarket, Markham, Mississauga, Richmond Hill, Bradford East Gwillimbury and Aurora have definitly crashed.

If land scarcity is driving prices up, then even a 15% foreign buyers tax and new mortgage rules for millennial buyers may not be enough to cool demand for housing or condos. The real factor may be the next recession, fueled by housing market mismanagement.

 

Please send this blog post onto your friends and neighbours because they should know as much about the Toronto area forecast factors as possible before they buy or sell.  It’s good to be helpful. Mistakes are painful.

March 2017 Price Index from Teranet – Index climbed right into August. October reports coming soon. Screenshot courtesy of housepriceindex.com.

What are the Causes of High Home Prices in Toronto?

The major factors that drive housing demand growth to Toronto: immigrant investors, better economy, low interest rates, increasing numbers of buyers in their home home buying years (millennials), and optimism all look on the upswing.  As mentioned in the Los Angeles Real Estate forecast post, here are the key factors that affect home prices:

Housing Demand – High overall demand – “all cash bidding wars” in some cases

Housing Supply – Throttled, supply is far from what’s needed

Developable Land – Throttled by government which is the single biggest factor

Builder Red Tape – Builders can’t build even if they have funding – high exposure to financial loss

Mortgage Rates – Continuing Low, especially in light of global economic slackening and with recent tightened lending rules

Down Payment and mortgage rules – these are being tightened this taking some pressure off of the purchase market and re-routing it to the rental market (people have to live somewhere)

Toronto Region Employment – moderate and remaining moderate despite Federal infrastructure

Taxes – rising quickly due to Ontario government and federal government spending

Buyer Income – moderate and not rising much

Home or Condo Prices – High and rising fast – out of reach for most buyers

Demographics – Millennials coming into family and home buying years and must begin to acquire their own living space

Number of Renters – increasing fast because of tight mortgage lending rules

New Home Construction: limited because of Green Spaces Act, but is a source of supply

Economic-Foreign Trade – Canada struggling and Free Trade agreements now being scrutinized because they don’t see to be working like they used to

Taxes on Sale of Home – huge tax burden for those selling in the city of Toronto

Some point to the Ontario government’s Places to Grow intensification plan as the major culprit in skyrocketing single detached home prices. Toronto condo prices haven’t risen like house prices have, yet condo demand is usually not spoken much about. It does look like a growing population want house to live in. A growing millennial family would certainly find it tough to live in highrise condos designed for adult living.

Share this post with your friends and clients. Everyone should know about the housing crisis factors and the economic spinoff from the Toronto Real Estate Market. It’s good and bad, but they should know the factors and help in the solution.

News posts in the Financial Post, Toronto Star, Globe & Mail, CTV, CBC etc, is often based on varied expert opinions and a few isolated market factors.  Why don’t we look at all the factors that comprise a realistic Toronto housing market outlook for 2017.

What are the Trends in Toronto Real Estate and New Housing?

Toronto Home Prices Historical
The only drop in Toronto home prices took place in 2008, in lieu of the great recession. Graphic courtesy of the Financial Post

ontarioeconomicforecast

ontarioconsumption

mortgage-rates-2006to2016

I’ve heard a number of convincing arguments for both a bubble and an extended period of growth in new housing development and resale housing price growth in Toronto. And I’ve heard before that money from China has no effect on the market, and from others, that today’s real estate market is driven by Chinese money. The banks and CREA just can’t get their stories straight and the media doesn’t report on how badly their forecasts were off the mark in previous years.

Was it All Driven by Chinese Buyers?

Fully 10% of new condominiums being built in central Toronto were going to foreign buyers, according to a survey released in April by the Canada Mortgage and Housing Corporation (CMHC); veterans of the city’s rough-and-tumble real estate market believe the vast majority are mainland Chinese investors  10% doesn’t seem like a big number and we’re told that Chinese buyers are only interested in luxury priced properties.

TREB’s own survey found that foreign buyers actually had little effect on the market, and it was the chilling effect of the fair housing act that destroyed what was a health Toronto real estate market.

foreignownership-toronto-cma
Graphic and data courtesy of CMHC

Strangely, CREA is forecasting a marked slowdown in housing start for 2017 to a flat market for Toronto, Mississauga and Vancouver. But they admit the market is still very intense. In fact, in my town, sold over-asking price stickers are on almost every sold sign. There’s not just a few bids on these homes, sometimes there are a lot. It would take a serious economic recession or government action to get rid of all those buyers. Given how troubled our economy still is, in Ontario, it’s unlikely any government would push it into recession.

If you can sell a new house for $600,000 or a Condo for $300,000, why wouldn’t developers be building as many as they can? With economic factors supporting growth, the problem must be political. A quick look at Ontario’s urban intensification plan might show us where the real core of the housing availability crisis and fueling high rent and housing prices.

A quick look at the US housing forecast and a small market forecast for San Diego tells you that the Americans are enjoying moderate growth now and all the way to 2020. That will help carry us.

In a low oil price world, the Toronto and Vancouver economies have benefited and that has to be the key factor.  And we haven’t benefited much because manufacturing jobs didn’t come back. In fact, even with the low loonie, jobs still moved to Mexico and China.

Expert Asks; Can You Believe Anything from Anyone Anymore?

We were told by the experts that the boom is only being experienced in Vancouver and Toronto, but the graph below tells a different story. If the US economy picks up, we could see all Canadian cities heating up.

Housing Demand Toronto Vancouver Montreal Calgary

The Usual Suspects?  Government

The upcoming jump in downpayment for mortgages will only hurt first time buyers who will still have to rent a condo or home somewhere, if they can afford it. There’s word the BC government may levy taxes against unoccupied homes and they’ve talked about harassing investors (background checks).  Of course, BC just levied the 15% foreign buyer tax and caught many unwary buyers offguard, resulting in extra costs of over $100,000 for some. That’s what happens when government starts meddling in markets – they don’t work anymore.

Ontario’s Urban Intensification Act appears to be colliding head on with the Greenbelt expansion plans by intensifying growth near the greenbelt areas and at the same time shrinking available land. Is this a wise move at a time of fragile yet positive economic growth?

Memories of a Sizzling Hot GTA Market

Housing markets such as Vaughan, York Region, and Central Toronto heated up considerably in 2017 and more people moved to these municipalities. No one looked at Aurora real estate in past years, but new housing developments, great lifestyle, along with a very limited supply of land within the town meant speculators jumped on the bandwagon. Days on market for Aurora homes was down to 10 last spring 2017 — only Oshawa homes sold that fast, and for over asking price.

Homebuyers are still willing to look beyond the green spaces belt, but they’ll look at Aurora, Bradford, Stouffville, and Newmarket first before heading north.

What will the next few months bring for the housing market and economy in Toronto?  What are your predictions?

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Generating leads for Toronto realtors and realtors in Los Angeles, Toronto, San Diego, Phoenix, Denver, Seattle, Chicago, Boston, New York, Dallas, Houston, San Antonio, Austin, St Louis, Minneapolis, Green Bay, Charlotte, Tampa, Miami, Orlando, Vancouver, Montreal, Ottawa, Oshawa, Hamilton, Newmarket, Aurora, Richmond Hill,  Calgary, Kelowna, Mississauga, Anaheim, Beverly Hills, Malibu, San Francisco, San Jose, and many more cities acorss North America. I welcome enquiries from the UK too.

US Housing Market Predictions – Real Estate Market Forecast 2018

Real Estate and Housing Forecast 2018, 2019,  2020

May 18, 2018.  Your Epic report and forecast of the 2018/2019 US housing market offers facts, data, perspective, predictions, price factors, expert opinion and forecasted trends from sources such as NAR, Trulia, Freddie Mac, Zillow, Case Shiller, Trading Economics, and more.

With home prices and mortgage rates on the rise, compare what you’ll be paying vs future mortage rates. Shop for the lowest mortgage rate now.

In this updated report and forecast:

  1. March and April market update
  2. Hottest cities to buy
  3. NAR/Realtor Outlook on the Housing Market
  4. Home price update and predictions
  5. US economic outlook – Tradingeconomics data
  6. Urban Land Institute panel discussion Video
  7. Freddie Mac Forecasts
  8. Jobs report and forecast
  9. Interest rates and mortgage rates
  10. Apartment rental prices and forecast

NAR reports that existing home sales grew in April, 1.1% which is well up from the 1.2% loss 12 months ago.  See the NAR charts below for others stats and which are the hottest markets for April.




Spring Market is Starting Strong

It’s an unusual spring market given the growing purchasing power of home buyers in low to mid market prices. That makes it a great market for those looking to sell their current home to trade up to a better one.

Hopefully you have a top notch strategy to sell your home for a higher price.  Sell it quick, but with a bidding war strategy.

Resale home transactions rose 1.1% in March showing clealy that buyers are hungry to buy.  However, listings have declined 7.2% and prices have risen 5.8% versus  last March.

It’s a sellers market and it will be for some time. If you’re hunting for houses for sale, you’d better have an advanced search strategy.

The dwindling numbers of homes for sale should push prices upward in Los Angeles, San Diego, Boston, Denver, Las Vegas, Dallas, Miami, Seattle, New York, and Houston . It’s all driven by a wildly successful economy and a resistance by local and state governments to support home development in their jurisdictions.




Please feel free to use this material on Linkedin and Facebook. It’s an important topic for buyers and sellers who face a big decision about buying a home or condo in 2018 as home prices and mortgage rates rise.

NAR’s March Update

Homes sales have risen for 2 months straight, however they’re down 1.1% from same time last year.  Although prices haven’t hit the 2007 records, they are too high for most to afford even though wages have grown. Home prices are now running at double the average wage increase.

The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600). March’s price increase marks the 73rd straight month of year-over-year gains — from NAR

Boston, New York, New Jersey

March existing-home sales in the Northeast jumped 6.3 percent to an annual rate of 680,000, but are still 9.3 percent below a year ago. The median price in the Northeast was $270,600, which is 3.3 percent above March 2017 – from NAR update.

Housing inventory is the most influential and persistent factor affecting home prices. Despite this, the media and some politicians blame speculation, building costs, interest and mortgage rates, cost of living, and mortgage rules. When the economy is good people want homes. Construction is strong but can’t keep up. Simple rule of supply vs demand is driving home prices.

Millennials still hopeful to buy a home in 2018

Looking for housing market predictions? Take a good look at prices, GDP, wages, jobs, and other key data below on the US Economy for the next 6 years and you may see a surprisingly positive picture, far from the dread of the recent stock market corrections.

Please do share this post on Facebook!

Should you Buy or Rent?

We all want to own a home, but does it  make more sense to rent? If you can’t afford a home in New York, Boston, Los Angeles, San Francisco, or Dallas, renting may be the only option. Here’s a few blog posts I’ve written on the US rental housing market, apartment prices, and on buying vs renting.

Buy vs Rent in 2019

What’s Driving the California Housing Market?

Strong demand from an eager demographic and economy is clashing with local resident NIMBYism to create a volatile market. See the California housing report.

This completely updated EPIC United States Housing Report has market updates and predictions for 2018 to 2020, and other data to 2026.

NAR’s VP of research Paul Bishop, predicts sales will be flat for 2018.

One of the biggest challenges is going to be in certain high-cost parts of the country where they have high home prices, relatively high property taxes or high state income taxes, then that’s ultimately going to make the cost of owning a home more expensive.

In addition, renters may lose the incentive to buy a home in high-cost areas if they can’t use the mortgage interest deduction or the ability to deduct some of those other housing-related costs from their taxes. It’s focused mostly on the higher cost areas. It’s certainly something that everyone will be monitoring and how the housing market reacts in 2018 and 2019  — from a news release on DSnews.com.




In this post, you’ll discover the hottest city markets, zip codes, get economic, employment, finance, and housing projections to understand the key fundamentals driving home buying, rental investment, home construction, and the real estate markets in 2018/2019 to 2026. Read thoroughly if you’re considering buying a house this year.

What’s the story for summer of 2018? It has to be Texas and Michigan, however the overall picture is of a very good spring and summer for the housing market nationwide and going forward to 2026. Population growth in San Francisco, Seattle, Los Angeles, Denver, Miami, Houston, Sacramento, Las Vegas and Phoenix continues strong.

The Complete Picture for 2018

Ready to choose your realtor and buy a house or condo this year? The outlook is really rosy! And how about investing in a rental income property for sustained passive income? This current lull might make the next 3 months the best time to buy. The outlook is as positive as could be for buyers. Lock in your mortgage rate.

Overall, predictions and outlook for the US housing market are positive. That’s because the US economy is on its strongest roll ever, bolstered by lower taxes, improved trading agreements, growing American confidence, happiness, comfort, freedom and the American dream has been kindled again.

Take a look at more detailed reports of major US city markets: Latest Posts: Sacramento Housing MarketSan Francisco Housing Market |  Boston Real Estate Market 2018 | Florida Housing Forecast 2018 | Miami Housing Market |  Los Angeles Real Estate Forecast | New York Real Estate Predictions | Houston Market Forecast  | Houston Real Estate Forecast | Seattle Housing Forecast

Apartment Rental Housing Market 2018

Are you considering buying homes for sale as an income investment?  With Apartment rent prices holding strong in 2018, it’s a solid investment strategy.

This graphic below courtesy of Trading Economics shows how the real estate market will be healthy for some time, and that buying a home is a wise investment (Tradingeconomics is a very informative site, have a visit afterward).

Increased government spending, low but slowly rising interest rates, and the repatriation of business and corporate funds back to the US means it’s a healthy, safe market for everyone.

Foreign investment has been strong because the world knows, the US is the place to be. American’s have always had a great attitude toward risk and business growth. Now the economy and business markets are allowing that spirit an opportunity to pay off.

NAR/Realtor Outlook on the Housing Market

Housing Indicator Realtor.com® 2018 Forecast
Home price appreciation 3.2% increase
Mortgage rate Average 4.6% mortage rates in 2018 to 5.0% (30 year fixed) by year end
Existing home sales 2.5% growth, low inventory problem easing
Housing starts 3% growth in home building 7% growth in houses
New home sales Growth of 7%
Home ownership rate Stabilizing at 63.9% nationally

Despite the market correction, experts feel this bull market could continue as long as business keeps coming back to the US. That’s a long process of repatriation. In the meantime, the jobs picture, wage growth, investment, and profit growth are giving real estate participants a lot of optimism.

The resistance to housing development is slowing. Conservatives are giving up amidst intense pressure by those facing outrageous housing shortages and skyrocketing rental prices.



Housing Shortages Won’t Ease

Although January’s sales were disappointing, it’s due to the severe shortage of housing. Demand is there and you’ll be competing against a hoard of buyers in 2018.  Corelogic expects 2018’s home prices will grow 4.3% by next December.  NAR and Realtors® expect only a 3% growth in prices this year. Nevada, Texas, Washington, and Florida are the states with the best outlook, and perhaps the best places to buy homes or rental properties.

The Bay Area, Portland, and Seattle areas saw the highest growth in prices last year while LA’s tumbled. Listings fell dramatically in cental California, Oregon, Washington, and New York.

Consumer mood was not so good in July of last year, mostly due to government problems. Yet the market came flying back. These challenges overcome mean more Americans will have more confidence in their personal situation.

The US Economy 2018/2019

These stats from Trading Economics show positive fundamentals that will drive growth in the housing market, and in turn will bolster the economy, since new household consumer spending and housing investment is a key driver of the economy.

The tax cuts should help although the Fed is counteracting that growth with a questionable raising of interest rates which seems to have sparked the sudden stock market volatility.  Although some disincentives are present for home buying in certain price ranges, that will help keep the market balanced for 2018.

Home prices should begin rising again this late spring in FloridaNew York , Boston, San DiegoHouston, MiamiSeattle, Bay Area and the rest of  overheated California.

Buyers and sellers will enjoy the market trends, stats, threats, and the key factors including housing construction starts described below. Enjoy the big picture!

Scroll down to see the stats, video, and charts on the strongest cities where you might buy or invest. And when is the best time to buy a house?

Sharing is Good! Share the Insight with others on FB and Linkedin

A brief overview of January 2018 from NAR.

Housing Demand 2018: More Buyers Joining the Party

Housing market demand predictions: Demand 2018 will see stronger demand as young buyers have more savings to invest in a home and are getting closeer to being able to purchase a home.




Housing demand is also being supplemented by bankruptcy survivors who waited out their 7 year exile joining first time buyer millennials, babyboomers, immigrants, foreign investors (Canadian and Chinese), and even gen Xers,  all of whom are looking for houses for sale.

New Home Construction Starts: Still Strong in 2018

New home building shows continued strengths, and should pick up by late spring when builders see a return of demand. Last February’s demand was also subdued.

The cost of living is rising and it means workers and businesses in cities such as New York, Los Angeles, San Francisco, Seattle, San Jose, Miami, San Diego, and Boston may migrate to cheaper cities such as Houston, Austin, and San Antonio. This is where job growth is best and housing is cheapest.

The price of apartment rental in cities such as Seattle, San Francisco, and San Jose Rents are extreme examples of the migration out of high priced areas. With limited housing and a strong economy, prices in San Francisco and the Bay Area cannot fall.

Inflation, Labor Shortages, and Building Supplies

Labor shortages, rising mortgage rates, and higher lumber costs are looming which could mean house prices will rise.  With nowhere to go, homeowners are resisting selling. The hope that the resale market will come to the rescue might be unrealistic and and perhaps even fewer resale houses will be for sale. This fall, new home sales have been brisk as reported by the Commerce Department.

Mortgage Rates on the Rise

15 year fixed rate mortgages are still a bargain compared to historical averages. A home at these interest rates has to be considered a big savings, compared to the added price.

Houses For Sale – Should You Buy or Sell in 2018?

The forecasts and predictions for housing markets in Boston, Los Angeles, San Francisco and the Bay Area, New York, Misami, Houston, Seattle, and San Diego etc. all suggest better times ahead.

See the post on the best cities to invest in real estate. Where can you find houses for sale with the best upside potential as a high return property investment?

Housing Experts Predictions and a Lot More

Let’s start off with the newly released 2018 Forecast from Freddie Mac.  The predict a good year ahead with a solid 5% growth in price. They note that the aging population could keep demand subdued although limited housing for sale should create upward price pressure.

Should buy or sell? See the specific market updates and predictions here: Los Angeles Real Estate forecast, San Francisco Bay Area forecast, New York Real Estate forecast, Boston Real Estate forecast, San Diego Real Estate forecast, Houston Texas Housing forecast, Seattle Real Estate forecast and the Miami Real Estate forecast. Bookmark this page for future monthly updates.




The need to refinance is low, homeowners aren’t too stressed out, and they’re using home equity to buy things which is good for the economy.  Overall, Freddie Mac’s report is positive for 2018.

Home Sales Expect to Rise Nationally

Freddie Mac Predicts strong sales driven by moderating prices nationally.

And as this graphic from Freddie Mac’s report shows, price appreciation is much less than before the last recession.

Hottest Real Estate Markets This Past Summer

According to NAR’s latest report, San Francisco is again the hottest city, taking back the number one spot from San Jose. The hottest small city is Vallejo California, enjoying a spillover from the Bay Area market.  Investors and buyers will be hard pressed to find buying opportunities are.

Silicon Valley prices will pressure businesses to look to cheaper cities such as San Antonio, Las Vegas, Houston, Austin, etc in 2018/2019.

Hottest Real Estate Markets in April 2018

Where are the hottest cities in the US? They’re all over this month and only 3 from California made the new top 20 list.

Screen Capture courtesy of Realtor.com

Hottest Cities for Investment Value

This chart from NAR shows where employment growth is strongest and the ratio of recent employment growth to homes being built. That’s a great stat for rental property investors looking for investment income in the best cities.

Compare that to wage growth and actual price appreciation. Again the Bay Area shows the best outlook for employment which has to be your top signal. However, rising oil prices and predictions for more, Texas may be your hottest state going through the summer.

Salt Lake City, Denver, Tampa, Dallas, Cape Coral/Naples, Charlotte, Las Vegas, Houston, San Diego, and Grand Rapids have great employment outlooks.





20 Hottest Housing Markets, January 2018 (Realtor.com) Rank (December) Rank Change Current Home Prices
San Francisco, CA 2 1 $1,249,000
San Jose, CA 1 -1 $875,000
Vallejo, CA 3 0 $390,000
Colorado Springs, CO 4 0 $270,000
Midland, TX 18 13 $265,000
San Diego, CA 6 0 $590,000
Santa Rosa, CA 7 1 $310,000
Sacramento, CA 8 2 $310,000
Denver, CO 11 2 $400,000
Stockton, CA 5 -5 $289,000
Modesto, CA 10 -1 $295,000
Dallas, TX 14 2 $360,000
Fresno, CA 12 -1 $205,000
Los Angeles, CA 16 2 $759,000
Columbus, OH 9 -6 $140,000
Chico, CA 29 13 $349,000
Oxnard, CA 21 4 $505,000
Santa Cruz, CA 27 9 $909,000
Detroit, MI 19 0 $349,000
Boise City, ID 26 6

Best cities for finding houses for sale and get a great return. For property investors or buyers with minimal cash, the cities of Kennewick, Detroit, Fort Wayne, Modesto, Fresno, and Waco look to offer the lowest prices on houses for sale. As usual, California and Texas lead the way, however Michigan is looking good with the President’s intention to bring the auto industry and related jobs back to the US.

In some markets such as Californiahome prices have leveled off a little from their relentless climb. There is a slight risk of a burst housing bubble. Outside of major city markets, the price growth potential in the next 5 years is highest. Some cities are hurting so invest carefully. Take a look at the best cities to invest in real estate and share your stories of which cities we should know about.

Here Panelists from the Urban Land Institution discusses 2017 and the next two year outlook:




Here’s 8 Reasons Why People Are Still Eager to Buy Real Estate:

  1. home prices are appreciating and it’s a safe investment over the long term
  2. millennials need a home to raise their families
  3. rents are high giving property owners excellent ROI on rental properties
  4. flips of older properties continue to create amazing returns
  5. real property is less risky (unless you get over leveraged)
  6. the economy is steady or improving (although Trump’s letting his enemies cause too much friction)
  7. foreigners including Canadians are eager to own US property
  8. bankrupt buyers are over their 7 year prohibition from the last recession and they can buy again.

Latest real estate market reports:

There are more renters now than in the last 30 years.

US homes are at their highest value ever

Foreign buyers buying record number of properties

Housing starts more than expected but not enough to fill demand

New Houses for sale dropped 3.4% in August

Resale houses for sale drops in August

How high can prices for houses for sale go in Southern California?

Read on to learn more about the economic fundamentals that suppport your purchase of real estate:

Buying and Selling — Is This the Right Time?

Are you selling your home? Speculation of a housing crash in Miami, State of FloridaLos Angeles, San Francisco Bay Area, Charlotte, San Diego, San Jose, Denver, Seattle, and many other overheated markets has more people listing their house or condo. Yet, the market is healthy, so there’s no emergency. Prices are stable so you won’t get much more by waiting.

Check out these other posts for homebuyers, investors, and realtors:

How to Sell Over Asking Price | 14 Ways to Improve Your Selling Price | When Should I Sell My Home? | Student Housing Investment | 10 Tips for Home Sellers Who Must Have the Best Price | Home Sellers Pricing Strategy | Better House Market Evaluation

Housing experts are predicting existing home sales of 6 to 6.5 million units in 2018 and then above 1.3 million new homes being built per month to 2024. The building is resuming now that the hurricanes and forest fires are over.

Will it be enough to support the economy? When American builders are feeling optimistic, it’s a good omen, however 1.5 million units per month is needed to fill forecasted demand for housing.

What’s also a good omen is what you’re going to read in this post. It may help you do many things in 2018, from finding employment (see the US Jobs forecast), to understanding politics, discovering high performing best investments 2017 to researching the best cities to live or buy houses or property in.

From Los Angeles to New York to Miami – Rental Property Equity/Income is King

Will Los Angeles Lead the Nation in 2017 in Real Estate?

Interest in rental income investment and apartments is particularly strong now in places like Miamic, Dallas, Seattle and San Francisco.  The Los Angeles housing, San Diego housing, San Francisco Bay Area housing markets are just a few to look at.  Seattle, Denver, Dallas, South Florida, Palm Beach, and New York  have a promising outlook too.

Short list of positive factors to bolster US Housing Market :

  1. moderately rising mortgage rates
  2. president Trump’s new tax plan
  3. low risk of a housing bubble / crash for most cities
  4. millennials buyers coming into the main home buying years
  5. a trend to government deregulation
  6. labor shortages pushing up costs of production and incomes
  7. the economy will keep going – longest positive business cycle in history

Check out the report on investments in rental property if you’re planning to buy in markets such as Los Angeles, San Francisco, San Jose, Silicon Valley, New York, Miami, Oakland, Phoenix, Seattle, Denver etc.  Buyers are still dreaming in California a good look at the San Diego Real estate market, and the Los Angeles real estate market as economic indicators, and a fresh look at mortgage rates. To be on the safe side, see this post on the likelihood of a US housing market crash in the years ahead. Looking to put your house up for sale in 2018? Find a Realtor now.

Housing Stats from NAR, Forisk, Trading Economics

These stats below are collected from top research and reporting companies including NAR, Forisk, Trading Economics, and other real estate market researchers.

 

Sharing is Good for your Social Health! 

Pass this blog post onto your friends and neighbors because they should know as much about the forecast factors as possible before they buy or sell.  It’s good to be helpful. Mistakes are painful!

Expert Predictions – US Housing 

1.  Expert Prediction from Eric Fox, vice president of statistical and economic modeling (VeroForecast) — The top forecast markets shows price appreciation in the 10% to 11% range. The top forecast market is Seattle, Washington at 11.2%, followed by Portland, Oregon at 11.1% and Denver, Colorado at 9.9%.

These economies have robust economies, growing populations and no more than two month’s supply of homes. In fact, the forecast of the Boston market increase sharply to 7.4% is due to reductions in inventory and unemployment. On the other hand, the worst performing market is Kington, New York with 2.5% depreciation, followed by Ocean City, New Jersey at -2.1%, Kingsport, Tennessee at -1.9% and Atlantic City, New Jersey and San Angelo, Texas tied at -1.4%.  — BusinessWire

2. Pantheon Macro Chief Economist Ian Shepherdson explains that “Homebuilders behavior likely is a continuing echo of their experience during the crash. No one wants to be caught with excess inventory during a sudden downshift in demand. In this cycle, the pursuit of market share and volumes is less important than profitability and balance sheet resilience.” — Marketwatch.

Can you save $1700 on Auto Insurance in one year? How about $10,000 in 6 years? That’s a lot of cash. Find out and compare auto insurance quotes.

Housing Construction Starts Will Slowly Rise

It’s predicted that new home construction won’t keep up with demand, however it is recovering and we’ll see more renters becoming homeowners over the next decade.

Car Insurance Quotes: Are you looking to save money for a down payment, save money with the lowest car insurance, find the lowest mortgage rate, or get a free market evaluation? Are you a realtor looking for US real estate leads?

 

If construction rates do moderate, prices in the hot markets of Miami, San Francisco, Los Angeles, San Diego, New York, Boston, and Phoenix should rocket to all time highs but what is the risk of a housing market crashHouse Renovation too is at an all time high in expenditure and this might have an impact on new housing starts.

FRED – Home Prices

US Mortgage Rate Trends

US Mortgage rates are forecast to stay low. Yet recently, mortgage rates have risen above the 4% mark and homeowners are locking in their home loans at the 30 year period. Some are calling this the Trump Effect. With Trump in power, lending requirements are expected to be eased, land opened up for development, and this should stimulate home purchases. With employment growing and wages moderating upward, the market is set for growth. Yet, some housing forecasters still cling to the idea that housing starts will moderate after strong growth to 2020.

mortgage-rates-trend

US Employment Outlook 2018 to 2024

According to BLS the job outlook is positive. Construction added 36,000 jobs in January, with 226,000 more than last year, with most of the increase occurring among specialty trade contractors (+26,000). Residential building construction trended up by 5,000 jobs. Total employment should grow by another 4,000,000 to 2024.

National Employment Growth Employment Growth Predictions, 2014–24 Median annual wage, 2014
2014 2024 Number Percent
Total, all occupations 150,539,000 160,328,000 9,788,900 6.5 $35,540

Job Growth by Occupation to 2026

2016 National Employment Matrix title and code (Chart data courtesy of BLS
Employment Change, 2016–26
Median annual wage 2016
2016 2026 Number Percent
Total, all occupations 156,063.80 167,582.30 11,518.60 7.4 $37,040
Personal care aides 2,016.10 2,793.80 777.6 38.6 $21,920
Combined food preparation and serving workers, including fast food 3,452.20 4,032.10 579.9 16.8 $19,440
Registered nurses 2,955.20 3,393.20 438.1 14.8 $68,450
Home health aides 911.5 1,342.70 431.2 47.3 $22,600
Software developers, applications 831.3 1,086.60 255.4 30.7 $100,080
Janitors and cleaners, except maids and housekeeping cleaners 2,384.60 2,621.20 236.5 9.9 $24,190
General and operations managers 2,263.10 2,468.30 205.2 9.1 $99,310
Laborers and freight, stock, and material movers, hand 2,628.40 2,828.10 199.7 7.6 $25,980
Medical assistants 634.4 818.4 183.9 29 $31,540
Waiters and waitresses 2,600.50 2,783.00 182.5 7 $19,990
Nursing assistants 1,510.30 1,683.70 173.4 11.5 $26,590
Construction laborers 1,216.70 1,367.10 150.4 12.4 $33,430
Cooks, restaurant 1,231.90 1,377.20 145.3 11.8 $24,140
Accountants and auditors 1,397.70 1,537.60 139.9 10 $68,150
Market research analysts and marketing specialists 595.4 733.7 138.3 23.2 $62,560
Customer service representatives 2,784.50 2,920.80 136.3 4.9 $32,300
Landscaping and groundskeeping workers 1,197.90 1,333.10 135.2 11.3 $26,320
Medical secretaries 574.2 703.2 129 22.5 $33,730
Management analysts 806.4 921.6 115.2 14.3 $81,330
Maintenance and repair workers, general 1,432.60 1,545.10 112.5 7.9 $36,940
Teacher assistants 1,308.10 1,417.60 109.5 8.4 $25,410
Financial managers 580.4 689 108.6 18.7 $121,750
Heavy and tractor-trailer truck drivers 1,871.70 1,980.10 108.4 5.8 $41,340
Elementary school teachers, except special education 1,410.90 1,514.90 104.1 7.4 $55,800
Stock clerks and order fillers 2,008.60 2,109.60 100.9 5 $23,840
Teachers and instructors, all other 993.9 1,091.80 98 9.9 $30,110
Receptionists and information clerks 1,053.70 1,149.20 95.5 9.1 $27,920
Sales representatives, services, all other 983 1,077.90 94.9 9.7 $52,490
Business operations specialists, all other 1,023.90 1,114.30 90.3 8.8 $69,040
Licensed practical and licensed vocational nurses 724.5 813.4 88.9 12.3 $44,090

US Housing Starts to 2024

New Housing starts and predictions to year 2024

This enlightening stat in the graphic below shows the US economy hasn’t recovered from the great recession and housing crash of 2007. Single family spending is rising rapidly, yet no one believes conditions for high inflation exist. It points to years of solid, healthy growth ahead with an unfulfilled demand for single detached homes.

 Graphic courtesy of paper-money.blogspot.ca

30 year and 15 Year Mortgage rates Graphic courtesy of paper-money.blogspot.ca

Housing and Interest Rate Forecast to 2019
2013 2014 2015 2016 2017 2018 2019
Housing Activity (000)
Total Housing Starts 928 1,001 1,107 1,177 1,204 1,246 1,299
Single Family 620 647 712 784 842 900 962
Multifamily 308 355 395 393 362 346 337
New Single Family Sales 430 440 503 561 610 647 693
Existing Single-Family Home Sales 4,475 4,338 4,627 4,828 4,978 5,029 5,119
Interest Rates
Federal Funds Rate 0.13% 0.13% 0.38% 0.63% 1.13% 1.88% 2.38%
90 day T Bill Rate 0.06% 0.03% 0.05% 0.32% 0.96% 1.71% 2.22%
Treasury Yields:
One Year Maturity 0.13% 0.12% 0.32% 0.61% 1.20% 2.41% 2.70%
Ten Year Maturity 2.35% 2.54% 2.14% 1.84% 2.38% 2.82% 3.22%
Freddie Mac Commitment Rates:
Fixed Rate Mortgages 3.98% 4.17% 3.85% 3.65% 4.10% 4.54% 4.96%
ARMs 2.88% 3.17% 2.94% 2.87% 3.18% 3.62% 4.04%
Prime Rate 3.25% 3.25% 3.26% 3.51% 4.15% 4.98% 5.48%
Data are averages of seasonally adjusted quarterly data and may not match annual

Chart stats courtesy of Nahb.com

Multifamily Home Starts - Millennial Buying Forecast

Save Money on Your Car Insurance

Saving on car might even cut your home insurance and give you more money for your home downpayment. Check now for the lowest quotes for car insurance Los Angeles, car insurance Boston, auto insurance San Francisco, auto insurance Denver, car insurance Toronto, and car insurance Chicago.

New Home Construction Prediction - Home Resales

Employment Outlook: Let’s not forget jobs. Total employed persons in the US will grow 800,000 over the next 2 years.

f4 Graphic courtesy of tradingeconomics.com/united-states/forecast

Existing homes or resale home sales, may slow slightly but US construction spending will increase. Prices will rise to 2020 and construction spending will grow through 2020.

Existing Home Sales to 2020 - Prediction to 2020 Graphic courtesy of tradingeconomics.com/united-states/forecast

Apartment Rental Forecast

Demand for apartment rentals is on the rise and construction starts of multi-unit dwellings is rising to match demand. That creates more opportunity for rental property investors to grow their portfolios in 2018. Yardi says YOY rent growth was 3.0% and they expect rent growth to remain in the 2.5% range.

Chart courtesy of RealPage

Cities with the most apartment construction include Dallas, Houston and Austin, reflecting Texas strong recovery. For more information, see this post on the best cities to buy real estate and best cities to live in and with the best job outlook.

Rental City Markets with Top Growth

Yardi released its winter national outlook report and forecasts a 2.5% increase.

There you have a quick graphical synopsis of factors that will support a strong US housing market for 4 more years.

What’s Your Personal Real Estate Sales Forecast?

Are you a full time realtor looking to grow your prospects and leads?  Full service digital marketing is a bargain when it’s done well.   What’s the forecast and trends for the real estate sales in your region? If you’re in Vancouver, Toronto, Miami, San Diego, San Francisco, and many other US centers, you’re probably grinning from ear to ear. But will you get your slice of that pie? Relying on real estate lead generation companies is another way you can go, however you have to pay forever and it’s questionable whether their leads are high quality.

My realtor marketing programs let you leverage the full mls listings with a powerful rets idx website, and capture more leads.  I’ve enjoyed serving clients in many housing markets including Toronto, Boston, Chicago, Houston, Montreal, New York, San Diego, Los Angeles, Florida, and San Francisco California.

Share this post on Facebook, Twitter, or Linkedin. It’s good to share!!

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Housing Market Predictions 2018: Ideal climate for best real estate investing.

Bookmark this page and return for further housing market forecasts, predictions, expert opinions and market data for most major US cities including New YorkLos Angeles, Palm Beach, Miami, For Lauderdale, Orlando, Boca Raton, Wellington, Delray Beach, Boyton Beach, Phoenix, Denver, Seattle, Chicago, Boston, New York, Dallas, Houston, San Antonio, Austin, St Louis, Minneapolis, Green Bay, Charlotte, Tampa,  Toronto, Vancouver, Montreal, Ottawa, Oshawa, Hamilton, Newmarket/Aurora, Richmond Hill, Oakville, Calgary, Kelowna, Mississauga, Anaheim, Beverly Hills, Malibu, San Diego, San Francisco, San Jose, Fresno, and other cities in the states of Florida, Texas, California, Massachusetts, Oregon, Washington, New York, New Jersey, North Carolina, Georgia, Illinois, Michigan, Ohio, Arizona, Nevada, Minnesota, Alaska, Hawaii, Utah, New Mexico, Lousiana, Alabama, Maryland and Pennsylvania.

Los Angeles Housing Market

Housing Forecast for Los Angeles 2018 to 2020

The real estate/housing market in Los Angeles enjoyed good growth during 2017. And predictions are for higher prices and good conditions for sellers.

However, the stats for January 2018 were a little sobering. According to curbed LA,  only 4,847 homes were sold in LA County. That’s an alarming drop from 6,613 in December and much less at 5,188 sales in January of 2017.

Prices grew $41k this spring of 2018. Predictions are for continuing high prices due to ongoing shortages.

The wild fires had an effect, in LA County and hitting regions such as Sonoma and Napa valley regions hardest. The insurance driven recovery should revive the housing market in LA.

The losses were estimated at nearly $10 billion with a $500 billion hit to the economy. The numbers are similar to the floods experienced in Houston TX or Miami FL .  Some homeowners are discovering they weren’t covered sufficiently with their home insurance.



The California Association of Realtors Outlook

CAR reported that:

  • single-family home sales fell 7.6% in January down to 388,800 and down 2.9% from January 2017.
  • January’s statewide median home price was $527,800, down 4.0% yet still 7.3% higher than January 2017.
  • entry level homes in California rose to $220,000 in California, up more than 10 percent from 2017 when entry-level home averaged $200,000.
  • the DOM for a single-family home remained low at 27 days in January, compared with 36 days in January 2017.

The California Department of Insurance said the fires cost $9.0 billion in insurance claims so far, which was 3 times the $3 billion claimed previously.  For the next few months however, California housing will be in extra short supply.



Fires might actually be an unfortunate distraction from the housing crisis that’s existed for many years now in Los Angeles and across the whole state of California. The state just can’t seem to get a handle on the need for more homes.

The OC Register reports that CEQA lawsuits against developments are a serious issue for housing, especially in the LA area. As Los Angeles residents suffer financially, and while housing crash rumors float around, prices are rising.  You’ll need an income of $120,000 to buy a home in LA in 2018.

Prices of condos in downtown LA are reportedly $90,000 higher than last year.

Insurance Companies Fielding Claims from Homeowners

Is it instinct or just common sense that California will continue as the most desired place to live on the planet? Does the climate in San Diego, Sacramento , Bay Area, and Los Angeles along with the high paying jobs, interesting geography, lifestyle and recreation, California is a magnet for people around the world.




Infographic Courtesy of CAR.org – LA Buyer Profile

In 2017, real estate sales in 2017 in California eased however house prices remain high in Los Angeles, Orange County, San Diego, and San Francisco / Bay Area housing markets which had previously approached prerecession highs. But will they rise further and is this the right time to invest in an income property?

The short answer is Yes. Houses for sale in Los Angeles County and Orange County are in short supply and new residential development is not keeping pace. It would take a market crash to stop the price rise and even then it would only be for a few years. For wealthy investors, a few years is well worth the wait. The question is where to get a realistic price? The hunt continues.



Santa Monica House Prices

Average House for Sale Still Sells

CAR reports the average house price in LA rose about 10% in late summer of 2017. San Bernardino, Riverside, and Orange County had strong price growth of 8% to 10%.   Contrast that with the drop in the Bay Area of more of about 3% or $14k to $33k for detached homes and you realize LA is a more attractive housing market for property investors.

The effect of the fires will be to reduce availability and raise prices. So not much relief in site for the LA market. As in most housing markets across the US, millennials have been shut out of the markets. They’re in their child bearing years and have saved up small fortunes to ready them to finally purchase. They’ll be buying in LA or Orange County somewhere.

Sales volume actually increased 11.5% in the last month, so homeowners appear to be loosening up finally.  Realtors are wondering how they can get people to sell their homes. Inventory is the big story for the fall of 2017.

This graphic from CAR.org’s latest report shows inventory in California is sharply down from last year. Sales above $500k were up up. Active listings in the lower price ranges are down considerably ( -10% to -28%).

Screen capture courtesy of CAR.org

And buyers
real estate investors are hopeful they can find the right property in the right city or zip code. Zillow has forecast house prices in Los Angeles to rise throughout 2018 while CAR shows it moderating. A lot depends on the political climate and interest rates.

Screen Capture courtesy of Trulia

We should keep in mind that only 30% of Californians own a home so the door is wide open for opportunity and new sales, particularly with first time buyers.  The problem is that homeowners don’t want to sell and buyers can’t afford the prices.

Why are Buyers Buying in California?

CAR’s 2016 survey showed only a small portion of buyers buy property as an investment. Only 13% are real estate investors.

California Home Buyer Survey Buyer Survey – Screen Capture courtesy of CAR.org

The US economy will pick up steam and Californians will be buying a home again even if they have 1 hour+ commutes, higher interest rates, and out migration to remote towns.

Check out the top housing factors below affecting housing prices in discover a better homes for sale search process.




The Telling Stats about LA’s Forecast

If buyer’s are hoping for bargains in the next 4 years, they’re unlikely to find them. Despite a dip in September, prices for homes and condos are up $24k to $30k from one year ago. Are the Asian and Persian buyers pulling out of LA?  The Trump instability and trade issue might be a pause before even more money pours into the reviving American economy.  Make American Great Again, also creates excellent investment opportunities in California, paying out in $US.

  • jobs being repatriated back to the US from Mexico and China
  • employment already good and rising
  • the end of Obamacare?
  • the end of Dodd-Frank restrictions on lending
  • general Federal easing of real estate development expected
  • it will take some time for mortgage rates to rise
  • still isn’t enough housing to house LA’s growing population (recession)




It’s the Los Angeles housing forecast that is perhaps one of the most interesting forecasts for the US for the next few years. California’s housing developers are hard pressed to build homes to house the population. We can speculate that homes will rise in price for the next 4 years. It’s not easy to predict though when people are talking real estate bubbles, NAFTA cancellations, Brexit, skyrocketing prices, vacillating oil prices, reduced immigration, and presidential elections.  




malibusmall
Malibu Coastal. Photo courtesy of marisolmalibu.com

Overall, the Los Angeles forecast was very good for sellers with plenty of demand and with the average price of a home hitting $690,000 last summer. Affordability is dropping though and only 30% of LA county residents own a home. 

Given the nasty commutes Los Angeles workers are enduring, this housing crisis should be a top priority for the California state governor.

A few pundits are suggesting homeowners need to build granny flats in everyone’s back yard.  Political battles are forming over the effect of regulations on LA’s and California’s home construction. Who will win? Will they battle Trump head to head to stop new development?

The situation may become worse than what San Francisco, Vancouver, and Toronto have been through, and what Miami, New York, and Boston may be into now.


Save your Money on Auto Insurance Quotes in LA

Are you paying too much for car insurance in Los Angeles? Some zip codes and neighborhoods are subject to higher premiums. Are you okay with that? How about finding lower car insurance rates and making it a habit of shopping for auto insurance every year? 2017 is a good year to save:)

Here’s the Hottest Zip Codes in Los Angeles

LA Curbed’s list of hot zip codes: Los Angeles’s 90012 zip code is shaping up to be the 2nd fastest growing area in the nation at 8.8% growth, 2nd behind only Gilbert AZ. The 90012 zip code includes Chinatown, the Civic Center, Elysian Park, Victor Heights, parts of the Arts District and Bunker Hill, and most of Little Tokyo.

Here’s the LA Times hot zip code list:

Santa Monica 90402 – Average home price: $3,237,500

Hermosa Beach 9025 – Average home price: $1,693,500

Lincoln Heights/Montecito 90031 – Average home price $458,500 +14.6%

City Terrace  90063 – Average home price: $320,000 +18.5%

Marina Del Rey 90292 – Average home price: $2,157,500 +23%

Manhattan Beach 90266 – Average home price: $2,100,000 +10%

Compton – 90220 – Average home price: $285,000 +9.8%

Playa Del Rey 90293 – Average home price: $1,517,500 +26.5%

Toluca Lake Studio City  91602 – Average home price: $1,022,500

Read more on the best zip codes in the US for investors and homebuyers.

LA Home Prices Fully Recovered?

The Los Angeles home price graph below courtesy of Zillow shows how prices have almost returned to pre-recession values and are beginning to level off. To forecast prices and demand for the LA region, we’d have to examine the cause of the moderation and if it’s a fact. Here’s LA’s hottest zip codes.

 

Last year, home prices in LA rose 7.8%. That’s a fairly strong ascent to just snap out of, so we’re left wondering what really is the outlook is for the 2017 to 2020 period? With prices high and rising, it makes sense that the number of buyers will dwindle (preferring to rent) and a leveling off would occur. It seems however, this is more of a guess by forecasters not really backed up by a solid consideration of all the factors that will be in play during the next 4 years – defeated regulations, growing economy, and reduced immigration.

Homes for Sale in Los Angeles: Prices, Trends from Zillow

Try the Zillow Home Search Widget to learn more about LA Homes for Sale. Realtors, click here to hear more about the Zillow leads program:

 

Home Sales Volume Chart: Los Angeles

la-home-sales-firsttues

Is there a Housing Bubble Market?

harvardHere’s the thing. According to a Harvard real estate guru, bubbles don’t burst until demand dries up — an increase in unsold inventory.

Do you honestly think there will be no demand for coastal California property, especially Los Angeles county or Orange county?  As you’ll see from the data in this post below, there is huge demand for property. Supply is the problem.

Factors Affecting House prices and Availability in LA

  1. Housing Demand – High overall demand – “all cash bidding wars” in some cases
  2. Housing Supply – Throttled, supply is far from what’s needed
  3. Mortgage Rates – Continuing Low, especially in light of global economic slackening
  4. Down Payment and mortgage rules – Banks are withdrawing FHA loans however some are offering downpayments as low as 3%
  5. Regional Employment – Very low and remaining low
  6. Buyer Income – low and not rising much
  7. Home Prices – High and rising – out of reach for many buyers – many consider LA homes grossly over-priced
  8. Demographics – Millennials coming into family and home buying years and LA millennials have had the lowest rate of home buying (pent up demand)
  9. Number of Renters – increasing fast
  10. New Home Construction: slow (100k to 140k per year)
  11. Economic-Foreign Trade – Trump expected to reduce US deficit
  12. Election Year – Voters uncertain of what Trump will create
  13. Taxes on Sale of Home – Tax situation is great for sellers




Historical Data

This intriguing graphic courtesy of https://journal.firsttuesday.us/ reveals that home sales in Los Angeles is actually well down from historical levels. The likely reason for that is lower income buyers simply have even less income to buy and of course the high prices. Home ownership is lowest in California.

la-case-schiller-index

A complete recovery of around 110,000 annual home sales will likely occur in 2019-2020, as end user demand in Los Angeles County is buttressed by a Great Confluence of Baby Boomers (Boomers) and first-time buyers who are lured by further employment (needed to accommodate population growth of roughly 1% annually since the beginning of the Great Recession).

That’s a forecast growth of about 20,000 homes per year over current current 2016 levels.

Another interesting stat provided by firsttuesday is the very low rate of home ownership and how much it’s plummeted. It’s on the uprise now, and you’re left wondering whether Trump’s renewed emphasis of America First will encourage the growth of home ownership?

la-homeownership

LA Economic Forecast – Very Rosy

la-economic-forecastThe forecast for economic growth for the Los Angeles is optimistic at this point. Visit https://laedc.org/2015/09/30/new-2016-2020-economic-forecast-published-93015/ for the most recent info and their forecast up to 2020.

 

This Stat from CAR shows homes have been on a rollercoaster ride of sorts yet, 2016’s expected resale volume is still well down from 2011 and 2012’s highs. If incomes should rise in the LA area, it could have the effect of stimulating new housing construction and increase sales of homes. With the number renters skyrocketing, there’s a huge pool of potential buyers.

Home reSales Forecasts 2016f

la-housing-stats

This graphic reveals the exceptionally high cost of renting in Los Angeles compared with other major centers. The housing availability problem isn’t isolated to California or LA, it’s a US wide issue. The high housing costs in the coastal California areas however may prevent many skilled workers from migrating to LA to work. Startups for instance may be forced to leave San Francisco, Bay Area and LA because of the cost. San Diego County may be a better option for the short term.

la-rentals

This is a short term forecast from LA realtor James Campbell, who believes prices will drop?!

What can we conclude from the above data? That LA’s market for realtors is very promising, yet just as it is in San Francisco, Toronto and Vancouver, finding sellers and convincing them to sell will be a key challenge.  Digital marketing efforts could be vital to any realtor hoping to maximize demand and achieve highest price for their clients. Is this the right year to buy rental income property?  Find out which are the best investments in 2017 including investing in real estate.

Check out other posts providing realtor tips, prospecting strategies, social media strategy, and tactics used by top flight luxury realtors and even lead generation companies.




Related posts: Housing Market 2018 | Florida Real EstateBlockchain Real EstateSan Francisco Housing ForecastLos Angeles Housing Market | Sacramento Housing Market | San Diego Housing Market | Real Estate Agents | Blockchain Real Estate | Toronto Real Estate SEO | Vancouver Condos | Toronto Condos | Vancouver Housing Forecast | Affordable LeadsRealtor Branding | Realtor Branding |  Realtor Growth Hacks | Realtor Skills | Realtors Benefits | Home SearchHousing Crash  | Stock Forecast | Foreign Exchange Rate Forecast | USD CAD Exchange Rate Predictions |  Oil Prices | Mortgage Refinance Rates 

Gord Collins —  I generate leads for realtors in Los Angeles, Phoenix, Denver, Seattle, Chicago, Boston, New York, Dallas, Houston, San Antonio, Austin, St Louis, Minneapolis, Green Bay, Charlotte, Tampa, Miami, Orlando, Toronto, Sausalito, Santa Clara, Mountainview, Fresno, NAPA, Tiburon, Oakland, Palo Alto, Anaheim, Beverly Hills,, San Diego, San Francisco, San Jose, Sacramento, Encinitas, Orange County, LA County, Riverside, Malibu, Santa Barbara, San Bernardino, Portland, Washington, Atlanta, Irvine, Nashville, Sunnyvale, Salt Lake City, Riverside, Rancho Cucamonga, Costa Mesa, Thousand Oaks, Simi Valley, Glendale, Oceanside, Long Beach, Huntington Beach, Carlsbad, Santa Clarita,  Henderson, Mesa, Temecula, Kirkland, Redmond, Kansas City, St Louis, Stockton, Scottsdale, Palm Springs, Chula Vista, Escondido, and Santa Monica, Venice Beach, and La Jolla. See additional housing market reports on New York NYC, San Diego CA, and San Francisco CA.

The Future of Real Estate | AI Blockchain Software Cryptocurrency Bitcoin and the Housing Market 2018

The Future of Real Estate

While housing markets in US cities waffle back and forth between market crash and price peaks, homebuyers, property investors and Realtors are wondering what real estate will look like in 5 to 10 years time.

Courtesy of Pinterest — kevin-miller-0125.blogspot.com

In this post, we look at the future of real estate technology (Fintech and Proptech). If you’re a homebuyer considering buying a house, these changes affect how fast you can buy and sell, and how your gain could be thousands of dollars.

When is All This Happening?

Changes are here now. Realtors and Brokerages will have to alter their roles and value proposition to add new value rather than being transaction facilitators, and find new opportunities that are appearing. New tech brokers have already arrived but they don’t have it all figured out yet.

When usage hits whats called critical mass, that’s when real estate businesses will adopt it completely as the new standard. It’s about more than blockchain in real estate alone.

Of course there’s resistance to new tech such as blockchain and bitcoin in real estate. Blockchain is tranformative. Yet when someone like rexmls lost $1.3 million mistakenly sending cryptocurrency to the wrong address, we know there is risk all round.




Realtors, investors, lawyers, mortgage agents, title/escrow people, and homebuyers are about to see the real estate exchange and financing business streamlined.

For instance, it’s estimated that 50% of major corporations will switch to blockchain business technology this year. Blockchain by itself is rocking every industry including real estate.

I’ll introduce blockchain and bitcoin below in more detail. In a nutshell, blockchain is the software platform that’s underneath Bitcoin and other cryptocurrencies. While Bitcoin is well known, it’s actually blockchain that has the best potential for all industries.  For some of us, this change is exciting. Change means opportunity.

I know you’re curious about Bitcoin cryptocurrrencies and blockchain, but understanding them technically is really tough. You don’t need to be an expert, but you may want to know what is driving this coming change.




2018 Housing Market Reports

Check out the Sacramento Housing Market, San Francisco housing market, Los Angeles Housing Market and Florida housing market forecasts.

The Blockchain Opportunity

Instead of being threatened by the progress to digital real estate via blockchain and other technology, Realtors, lawyers, investors, builders, property managers and mortgage agents should welcome the opportunity of this new era.

Here’s a small list of blockchain startups that have jumped at it.

And the key opportunity might be in first mover advantage. Realtors might redesign their brokerage to utilize RETS IDX listings, AI driven marketing, and blockchain-based transactions.  It’s early, but the right time to learn.




What’s coming is an era of weakening monopolies, greater efficiencies and perhaps lower home prices.

You can imagine how the establishment would like to maintain the old paper-based, complicated transaction process that allows the banks and big real estate brokerages to guarantee their cut of this $116 Trillion dollar global real estate market.



New tech entrepreneurs relish usurping the dominant role in an entire, lucrative industry. They’re motivated. The high rising price of bitcoin should tell you that something big is brewing. They’re already at it in real estate.

Real estate sales using Bitcoin or Ethereum are adding legitimacy to the use of cryptocurrencies in the real world” — Manuel Perez of the Coral Gables, Fla.-based Elizabeth Perez Team. Screen Capture courtesy of Housing Wire

What’s Driving the Push to Blockchain and AI?

The real cause of this future is the high cost of real estate, monopolies, and the over-complicated/regulated process that real estate professionals must follow to buy and sell homes. It raises prices and slows transactions. And younger consumers don’t like the ring of “million dollar homes.”  They like this new technology because they think it will save them money.

From smart contracts to Bitcoin currency to fractional ownership, and artificial intelligence driven buying and selling, the entire real estate industry is about to be streamlined. From finance to construction, blockchain technology in particular is about overwrite the sector. Real Estate will be hard to recognize.

But can the big companies control blockchain to keep the market to themselves? That’s very unlikely since blockchain opens everything up to innovation, transparency, ease of purchase, and lower costs. Buyers will find that very hard to ignore, as will real estate professionals. The smart Realtors will be on this now, to give themselves an advantage in branding and expertise.

Realtors may not have to be blockchain experts, they can use the myriad of blockchain applications and services that will be available. It could be a period of entrepreneurship and creativity for Realtors, and for home buyers and sellers as well.



Who Guards the Status Quo?

Brokers, marketing, banking, retail agents and others facing sudden disruption may enjoy their monopoly and legal power to keep the old system intact.

This new wave of well funded cryptocurrency, blockchain and Realtech startups change the game and playing field. The new blockchain based system is a completely new approach to transferring ownership of property from one party to another. With Cryptocurrency, the banks, mls associations, forex companies, and others could be completely bypassed.

Even the mortgage industry is seeing new startups that offer reduced costs, fees and fraud, and improved efficiency, speed, and transparency.

 

Sharing is Good for your Social Life — Make Sure others get an introduction to the new technology on FB or Linkedin

Change from Many Directions and It’s Just Starting

The future of real estate will see disruption from many sources, technological, cultural, financial, and political.

The $36 Trillion US real estate industry is pressured by issues of complexity, affordability, frustrated demand, housing development restriction, rising interest rates, competition, big data, blockchain, and more. They’ll all play a role in a complicated forecast amidst an uncertain economic outlook beyond 2020.

Will you be buying your next home via an app using Bitcoin? Should you even buy a home, or rent? It’s not only about techno changes in 2018. The future of real estate involves lifestyle, economic, and investment factors.




Will Realtors and Financier’s Roles Change?

While removing the middleman might be the uber utopia for tech-obsessed 20-Somethings hoping for a price break on a million dollar house, it will not be easy to push big banks, MLS’s, state govnernments, and real estate companies out of the future of real estate. Politics, law, habit, and need for expertise will ensure Realtors don’t fade away too quick.

Propy is a new blockchain based online brokerage serving the world

Realtors, MLS associations, and big brokers control the mls data and in this day age data monopoly is how you eliminate competition or gain monopolies.

A number of tech driven competitors are disrupting and trying to weaken the current megalopoly in real estate markets. Thus far they haven’t been able to land a decisive blow. Big Data may be the weapon to topple the traditional system unless the big brokerages learn to utilize it somehow.

Technology driven companies such as Zoocasa, Zillow, and Compass are growing fast and making inroads on various MLS and Realtor competitors. The fact that the majority of Realtors have few listings or sales and aren’t well supported by the big brand brokerages means these tech companies have opportunity with their own hungry masses of agents. The fact the big brokerages don’t share information with agents now, tells you that Realtors would jump ship quick.

And for consumers, a reduction of commissions and expansion of marketing capabilities means consumers might gain from new tech entrants. And in terms of streamlining, it’s estimated that closings could be reduced to 10% of their current duration.

Yet the MLS associations and brokers hold a lot of data and can keep it out of the hands of real estate startups. Legal battles are raging, but the MLS’s aren’t winning the wars.

Propify, an Australian startup, hopes to leverage the technology into a one-stop shop for home buyers. Drawing from various listing sites, governmental databases and social media, the software company aggregates all available information about available properties into a single space, sourced from a blockchain – from Real Estate Weekly.

Who Owns Big Data?

Big Data is owned by big tech, finance and retail companies right now and the battle over who gets access is being waged. The data is so important, it stands to reason that a few companies would not be permitted by government to own it or leverage it for massive monopolistic wealth. However, that conceivably could happen in the Amazon era.

If everything from finance, real estate to AI driven robots, having it locked and controlled by any money hungry company could bring the system and economy to halt. Big data and open source access will have to be made a basic freedom.

For that reason, how could the NAR or MLS or anyone hope to monopolize their data and market access? It’s a losing battle.





The Coming Blockchain Revolution in Real Estate

According to Forbes, real estate venture investors deployed over $5 billion in real estate technology in 2017. That’s 150 times the $33 million invested in 2010. Blockchain is just one part of that investment.

Blockchain technology is important to the commercial real estate market since it streamlines processes, reduces fraud and cuts costs

What is Blockchain?

A blockchain is a secure network of computers that creates as a living ledger for transactions. When the record is updated with new information — the signing of a contract, the movement of funds, the transfer of ownership — it is updated and time stamped in every computer simultaneously, whether there are two dozen or 2,000. The records are the blocks, the network is the chain — from Real Estate Weekly.

Blockchain technology and cryptocurrency  may influence how real estate is transacted in future and who will participate in buying and selling.

Coinify states that blockchain will speed up real estate transaction, decrease fraud, and increase transparency. For those who worry about international money laundering and organized crime, Blockchain could cut police and investigation costs. Blockchain offers a real digital paper trail.

Blockchain leverages mls type housing data and makes it usable on a larger scale. So the potential power of blockchain systems will threaten the data monopolies that exist in some states and mls districts.

Direct Transaction between Buyers and Sellers

The rewards of listing on a blockchain accessible system will be too much for homeowners and real estate agents to resist.  With blockchain technology property and transaction information is published to a public ledger giving all parties access to the home-buying or leasing process.  Owners, tenants, operators, and service providers will have access to this stream of incorruptible data. The buyer and seller deal with each other directly.

According the IBREA, “Blockchain offers an open source, universal protocol for property buying, conveyancing, recording, escrow, crowdfunding, and more. It can reduce costs, stamp out fraud, speed up transactions, increase financial privacy, internationalize markets, and make real estate a liquid asset.”

How To Buy Real Estate Using Bitcoin

Yes, a lot of people want to know.  I’d advise reading this post on HGTV to get started. Will you still need a real estate agent? Yes, and a real estate lawyer to review all the documents. And these people are insured just in case something does go wrong.

However, make sure you trust the second party if you’re thinking of buying into real estate. “If you want to reverse the transaction due to any litigation, then you need both parties to be compliant,” says Jake. “Bitcoin transactions are not reversible.”  — HGTV




Bitcoin and Real Estate

Cryptocurrencies such as Bitcoin are highly volatile right now, however once they stabilize, homeowners will not balk at selling in Bitcoin. The bitcoin cryptocurrency is set to rock the banking and retail industries, so why not real estate?

Need to know how to Buy a House or Condo using Bitcoin?

Real estate can be a lucrative business yet the drive for cost savings and high prices makes players investigate and try out different solutions. Real estate agents, landlords, mortgage agents, and others have been reluctant to adopt software solutions for fear they would lose competitiveness. The future of real estate is technology in almost every area.

However, that intense competition is yet another driver of the kind of change that could see agents and brokerages disappear. I hope that’s not you, but let’s say the flock is culled. What kind of new real estate sales environment is being created and how will you adapt? There’s opportunity in everything.

Younger Buyers Love Choice and Apps

Millennials are the biggest, most wealthy group of consumers now and they’re proving to be brand agnostic and want open source everything. Throw in millions of wealthy young Chinese immigrants/investors, and you can guess that tradition in real estate is about to be replaced by a new culture — the Uber culture mostly online. On Tech.co, Boris Dzingarov suggested 3 factors will change real estate marketing greatly:

  • Video
  • Mobile devices
  • Online reputation management





Yet, many agents are using video, have already set up mobile friendly sites, and even dressed up their Linkedin and Facebook pages. And they’re not anymore disruptive than anyone else. I think what may mark the new agent is using technology and digital marketing to connect with more prospects.  What may be difficult for them though is that homebuyers and sellers may not accept their pitches. If you can’t go to them, then you’ll have to show up online so they can reach you.

If you have no digital marketing strategy to connect with prospects, make an impact, and remain visible online (top realtors are taking it all for themselves) then perhaps the forecast is as stormy as Dzhingarov is predicting.

Why Agents Will Still Be Needed

Currently, 80% of home purchases are conducted using Realtors, and given the various services they handle, it’s hard to conceive they would be made completely redundant by blockchain or other technology.

Here’s where we can’t do without them:

  • better knowledge of local neighborhoods
  • assessment and advice on contracts
  • real human advice on quality of the property instead of property data collected
  • price negotiation with buyer or sellers
  • spares you the anxiety of buying and selling real estate online
  • help you get a higher price through staging, presentation and sales support
  • arranges inspection and home showings – saving you time

The Outlook for Real Estate Brokers

I’d like to take a moment to discuss what I see happening in this industry. Here’s the top 15 disruptions that may hit the real estate biz in the coming years:

  1. Real Estate Teams – teams loaded with extra services will battle it out with discount brokers to offer better service, particularly in the luxury real estate market where Luxury realtors will go the extra mile.
  2. MLS Data Freely Available to Everyone – no secrets for realtors to use as a trump card. Homeowners will feed home stats to online vendors who will provide increasing marketing power for them.
  3. Social Media Growth – Realtors will expand their circle of contacts via Linkedin and Facebook, and home sellers will look to engage more buyers to get higher bids for their client’s properties. Social media engagement will keep them connected and actively top of mind to prospects, as other realtors impinge on all their clientele.
  4. Content Marketing – more sophisticated and engaging visual content such as interactive infographics and pdfs, and interactive home tours will let buyers drill down quickly to everything they want to know about the home and neighborhood.
  5. Sophisticated Video – slick videos with aerial shots and stunning quality will become templated much like WordPress web sites are now
  6. SEO & SEM– optimizing for whoever is looking for real estate or wants to prepare for sale. This means having a good SEO is critical for inbound marketing, link building and MLS listing optimization. PPC advertising and remarketing ads will play a role too.
  7. Trustworthiness – the insecurity of Uberization will mean parties will be scrutinized for their reputation and professional credibility. Those realtors that have this all laid out strategically will pass the cred test.
  8. Thought Leader/Advisor – generosity of key realty knowledge will influence because real estate is an expensive investment that the average Joe homebuyer doesn’t understand. The realtor’s role will evolve to become a trusted advisor.
  9. Complete Property Transactions Done Online – from bids to closing costs, every aspect of the transaction will be done online, perhaps via a large tablet device connected to a printer. See Realtypoint’s excellent post on this. 
  10. Google, NAR and CREA will lose control of the online realty market – homeowners will list with online entities for exposure and pay minimal fees.
  11. Property Management – More brokers and agents will move into the property management and mortgage business to create more relevant clients, retain them, and build visibility.
  12. More Real Estate Agents Will Go Out of Business – deals will disappear, commissions will fall and competition will be intense and only those with huge client bases will make it.
  13. Clients will gravitate to Large, insuring Finance Comapnies – these firms are capable of insuring transactions, because regular consumers are likely to make big mistakes. Right now of course you and your brokerage and (CMHC in Canada) or (FHA/PMI) in US provides it.
  14. Niche, Boutique Brokerages – they’ll have an edge in relevance, usefulness, and attraction to many buyers and sellers – particularly brokers that offer a la carte services, and prove they have specific types of buyers for a property (e.g., Chinese or Middle Eastern buyers).
  15. Intense Hyperlocal Focus – realtors and teams will use outdoor advertising and social media to dominate local markets.

The Uberization of real estate has already happened. I’m wondering which new Zillows and Trulias rise up to serve this new market? No doubt it’s being discussed in boardrooms right now. [Note: I was invited recently for interviews for a senior digital marketing position with a big, new up and coming lead generation business in Toronto].

Where Will You Be in 5 Years?

The point of this post is to ask you where you’ll be in the coming years and whether you will have initiated the steps to build your future realty business. It’s wise to start planning and connect with the people who will help you grow and sustain it.

What are you thoughts? What changes do you foresee? Will 2018 to 2020 look much different for you and your brokerage? What are you doing to help you survive and thrive in the blockchain era? 

Speaking of hot markets, read the forecast, outlook, and predictions for housing in Toronto, Los Angeles, San Diego, and Vancouver.

 

Trending in 2018/2019:  Foreign Exchange Rate ForecastBuying a House | Los Angeles Housing Market | Florida Housing Market 2018Toronto Housing Market | TREB Market Report | Houston Housing Market | Miami Housing Market | Housing Crash 2018San Diego Housing Market | Real Estate Agents | Future of Real Estate | Seattle Housing 2018 | Boston Housing Market | Sacramento Housing Forecast | Affordable Leads |   Realtor Skills | Realtors Benefits | Home Search | SEO Expert |  Rental Income Housing | US Dollar Forecast

Best US Cities to Buy Rental Income Properties 2018 to 2020

Hottest Cities for Real Estate Investment 2018

Which are the Best Cities to Buy Real Estate?

It’s a rosy outlook for the housing markets in America and anyone buying real estate. Prices have moderated, new city markets are catching investor’s attention. However do you know which are the best cities to invest in real estate in 2018

Do you have a strategy to buy in the best cities, use a property management company or use property management software to run your portfolio.

You’re just about set to make 2018 a great investment year. Have you looked at the forms of property investment should you choose — rental income suites, apartment buildings, or student housing reits? Open your mind the right type of property investment in the right city will outperform everything else.




Which cities and states offer the best employment outlook, lowest taxes, regulations, large millennial population, and a pro business climate? Florida, California, Michigan, Colorado, Miami FloridaBoston, Bay Area, New York , Massachusetts, or is it Ohio and Michigan?

Need Better Software to Help you Manage your Property Portfolio?

ManageCasa is a simple property management solution you’ll like:

Real estate management is better when it’s visual. Property management shouldn’t be done on spreadsheets.

The most recent update on hot investment cities (average profit US-wide was at $336,000) for sellers still has San Francisco as the tops.  And San Francisco Sunnyvale San Jose might be tops due to high rental prices, lack of housing and land, silicon valley paychecks, and an improving economy means there’s no bubble and no crash possible.

But the Bay Area isn’t the only city with potential.  Dallas, Houston, Austin, San Antonio and Fort Worth are getting special attention these days. Texas is growing. Michigan has huge potential. Even Boston has potential. Businesses are relocating to these cities for a lot of reasons.

In this era of investment, the best property investments may be in other cities. Even if you intend to stay close to home, knowing what’s going on in other states might provide a superior return on investment.

As you may have read in my very popular post on US Housing Predictions for 2018 to 2020, the US housing market is hot and some cities are hotter than others. No housing crash is forecasted. The list below of the top 80 cities to invest in real estate represent your best opportunities for high returns. Even normally depressed quiet markets are coming to life and beginning to catch investor’s eyes. It’s good news for Michigan, Florida, California, Texas, and New York and even better for real estate investors in 2018.

Record Demand for Home, Condo and Apartment Rentals

The difference in this latest real estate rebound is the number of Americans renting and still needing to rent a home or condo.  That’s created the incredible income investment opportunity called rental income investment properties for passive income investments or self-managed property investments. 30% to 40% returns are not unheard of. It’s once in a lifetime wealth building. The kind of cap rates major investors can only dream of. Get some tips on how to do homes for sale searching better.

Just an aside on investment opportunities in condo/apartments is student housing investment in Vancouver. You may want to check out the underlying fundamentals and demand for student housing.

Scorching hot opportunity in the best cities! Will the hot markets of San Francisco, San Jose, Silicon Valley, Phoenix, and Los Angeles do as well as expected? Those cities with the highest home prices are not your only option. There’s plenty more towns and cities across the nation where you can buy rock bottom and sell high including this list of real estate by zip code.  Cities you’ll read about below with lower home prices and rising employment rates may be your best bets for 2017 to 2020.

One high performing rental income related opportunity to investigate is student housing investment in Vancouver. The student housing market in Vancouver is like no other place. Foreign families like Vancouver BC in Canada for many reasons. And the Canadian government is raising the limits on foreign students and on post grad immigration.  That means lots of demand coupled with high rents which translates to big profits. A company called CIBT has dominated this sector and is growing fast. You can invest with them like a REIT.

 

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Make sure others learn about the once in a lifetime opportunity in real estate investment with rental properties.

With strong economic growth as certainly continuing, rental income investment offers multiple ways to grow revenue. And your property may look even better to another investor when you sell. Lets see what the experts predict and what the stats say about the best cities and zip codes.




Renter Statistics:

  • Growth in rental demand was largest for people with incomes lower than $25,000; a group that accounted for four million new renters over the past decade.
  • Growth for people with household incomes over $50,000 accounted for 3.3 million new renters.
  • There was an increase of 1.6 million renters for those with incomes over $100,000 a year.
  • The amount of rental stock also grew, and the single-family house share of the market increased from 34-40% of the total rental stock
  • Vacancy rate was less than 5%  in 75% of the United States largest cities by 2015. 

Stats courtesy of go.homebay

Apartment and Single Family Home Rental Price Index
Price Index Screenshot courtesy of AMERICA’S RENTAL HOUSING: Expanding Options for Diverse and Growing Demand

Houses for Sale – The Ultimate Home Search Source

Share the Home Finding Machine — the ultimate source for searching for Homes for Sale anywhere in the US or Canada. Help your friends find their dream home!

Skyrocketing Home and Rental Prices in California are a Continuing Allure for Investors

In major urban areas such as San Francisco, Los Angeles, Oakland, Boston and New York, the demand for rental properties is skyrocketing. Investors might see ROI of 30% or more on rental income property and that beats any stock market these days.

Foreign buyers too, are purchasing lower priced homes now, likely because of high prices on luxury homes along with the fact they can rent them out — passive income which is a hot topic for babyboomers in particular. Realtors are seeing a much different type of buyer today and they need to keep up on how competitive properties are in other cities in the US and Canada.  Investors just want a great return.

Home prices are rising everywhere, but what makes San Francisco so hot is its lack of housing stock and a booming job market. Where there is little growth in new housing development together with a healthy job market and a good demographic (millennials who can’t buy) the demand for rental housing has to explode.




percapitasanfrancisoExperts try to explain away this demand by blaming speculators and high housing prices, yet the driver of rental demand in San Fran is too many employed people with nowhere to live. And wages are rising. Silicon Valley’s rental market is so tight, there’s an overflow to Sacramento and other inland cities.

In-migration has been strong at a time when millennials are leaving home, contributing to rocketing apartment and home rental costs. This is fueling the tremendous demand for investment income properties. With no one building new homes and the government not acting to help, it’s up to private investors to take the helm.

With crazy high ROI, we’ll see rental income investors and developers race into these regions to build new properties. It’s a great investment situation for Americans, investors and realtors.




San Francisco is one area however that might not benefit. Its strong economy is driven by large tech corporations that add value to imported technology and products manufactured in China. Which is why Silicon Valley is hostile to Trump. California’s economic outlook is still very bright, but it’s low potential rental income outlook could send investors over to other US cities to invest in, such as those in green areas in the charts below.

Rental Income Property Investment Opportunities

With or without Trump, the US economic outlook is good. The outlook for rental income property is exceptional. Realtors and investment advisors should be looking hard at this market. Even babyboomer investors are looking at the potential of retirement income. Many babyboomers are a little nervous about how they’ll fund their “stay put” retirement plans.

They’ll need extra income to stay put and revamp their home over the next 30 years, and they may look to rental income to get that money.  A percentage may just sell their home and leave it to a developer/investor to turn it into the multi-family unit. That investor might be you.

Here’s Realty Trac’s outlook on the best US cities to invest for rental property income

usheatmap-rental-roi

Complicating your investment decision is another set of statistics from Realty Trac that shows the west still has the highest returns currently but the green zones are predicted to perform better.

best-rental-income-cities
Screen capture Courtesy of Realty Trac

How about a 32% Yield on a Single Family Home?

best-rental-income-cities-by-revenue

(Screenshot above courtesy of RealtyTrac single family rental market reports)



Top 80 Cities and their Potential for Passive Rental Income ROI

These converted stats in this chart from Smart Assets are very insightful. They used U.S. Census data, to calculate the price-to-rent ratio in every U.S. city with a population over 250,000. This is their list of 80 US cities below with the worst potential for rental property income investment appearing at the top (The ones at bottom such as Detroit have better potential, unless employment fails to recover in Michigan).

US Cities with Population above 250k Price-to-Rent Ratio

Home Price

(for a $1,000 Rental)

1 San Francisco, California 45.9 551000
2 Honolulu, Hawaii 40.1 481000
3 Oakland, California 38.5 462000
4 Los Angeles, California 38.0 456000
5 New York, New York 35.7 428000
6 Seattle, Washington 35.1 421000
7 San Jose, California 34.7 417000
8 Long Beach, California 34.6 415000
9 Washington, District of Columbia 32.0 384000
10 Anaheim, California 31.3 375000
11 San Diego, California 30.3 363000
12 Portland, Oregon 29.3 351000
13 Boston, Massachusetts 28.7 344000
14 Jersey City, New Jersey 26.3 316000
15 Denver, Colorado 26.0 312000
16 Chula Vista, California 25.8 310000
17 Santa Ana, California 25.3 303000
18 Sacramento, California 24.3 291000
19 Miami, Florida 23.4 280000
20 Austin, Texas 23.4 280000
21 Atlanta, Georgia 23.0 276000
22 Colorado Springs, Colorado 22.8 274000
23 Bakersfield, California 22.5 270000
24 Raleigh, North Carolina 22.4 269000
25 Riverside, California 22.4 268000
26 Lexington, Kentucky 22.0 264000
27 Albuquerque, New Mexico 21.9 263000
28 Chicago, Illinois 21.6 259000
29 Henderson, Nevada 21.6 259000
30 Chandler, Arizona 21.5 257000
31 New Orleans, Louisiana 21.4 256000
32 Virginia Beach, Virginia 21.1 253000
33 Fresno, California 21.0 252000
34 Newark, New Jersey 21.0 251000
35 Minneapolis, Minnesota 21.0 252000
36 Anchorage, Alaska 20.9 251000
37 Phoenix, Arizona 20.3 244000
38 Louisville, Kentucky 20.1 241000
39 St. Paul, Minnesota 20.0 239000
40 Plano, Texas 19.9 239000
41 Stockton, California 19.5 234000
42 Durham, North Carolina 19.5 233000
43 Las Vegas, Nevada 19.3 232000
44 Nashville, Tennessee 19.1 230000
45 Greensboro, North Carolina 19.1 229000
46 Mesa, Arizona 19.1 229000
47 Lincoln, Nebraska 19.1 229000
48 Oklahoma City, Oklahoma 19.1 229000
49 Wichita, Kansas 18.4 221000
50 Charlotte, North Carolina 18.1 217000
51 Cincinnati, Ohio 18.0 216000
52 Aurora, Colorado 18.0 216000
53 Kansas City, Missouri 17.4 209000
54 Tulsa, Oklahoma 17.2 206000
55 Omaha, Nebraska 16.7 200000
56 St. Louis, Missouri 16.7 200000
57 Orlando, Florida 16.6 199000
58 Tampa, Florida 16.6 199000
59 Tucson, Arizona 16.3 196000
60 Philadelphia, Pennsylvania 16.3 196000
61 Dallas, Texas 16.2 194000
62 Laredo, Texas 15.9 191000
63 Columbus, Ohio 15.9 190000
64 St. Petersburg, Florida 15.8 189000
65 Fort Wayne, Indiana 15.5 186000
66 Baltimore, Maryland 15.5 186000
67 Arlington, Texas 15.5 186000
68 El Paso, Texas 15.4 185000
69 Indianapolis, Indiana 15.4 184000
70 Houston, Texas 15.3 183000
71 Fort Worth, Texas 14.8 177000
72 Jacksonville, Florida 14.3 172000
73 Milwaukee, Wisconsin 14.2 170000
74 San Antonio, Texas 13.7 164000
75 Toledo, Ohio 13.3 159000
76 Corpus Christi, Texas 13.1 158000
77 Memphis, Tennessee 12.3 147000
78 Pittsburgh, Pennsylvania 12.0 144000
79 Buffalo, New York 10.7 128000
80 Cleveland, Ohio 10.5 126000
81 Detroit, Michigan 6.3 75000




What About the Local Economies?

Last year’s report from Millken research reveals the cities with the best performing economies in 2015. This was put out in December 2016.  Florida cities are showing a marked rise. Recent reports focus on the apartment rental prices in San Francisco, Sacramento, and San Jose as offering outstanding returns for investors.

best-us-city-economies-ranking

And this is Millken’s list of worst performing cities, likely the ones you might avoid.

worst-us-city-economies-ranking

Screenshot courtesy of Millken Institute. Read the detailed  Millken 2015 Best-Performing Cities report with rankings by economic component. Excellent insight to help you fine tune your rental income property investment choices.

Their interactive map of US cities with the best economies below is a very helpful tool to help you measure the investment prospects of one city versus another.

Lowest car insurance in these cities: LA car insurance, Boston auto insurance, Phoenix car insurance, San Francisco car insurance, San Diego car insurance, Seattle car insurance, New York car insurance, Indianapolis car insurance, Detroit car insurance, Philadelphia auto insurance, Toronto automobile insurance, or Chicago car insurance.

In this video below, Mike Hambright talks about apartment rental markets, and how to make money from cash flow and property value appreciation.




Are There any Warnings?

This graphic from Coreglogic warns about overheated city markets. Yet it also shows how markets like Silicon Valley, actually has lots of room for rent rate growth. And New York has the lowest rent rate to home price ratio.

Screenshot courtesy of Corelogic.com

There are so many real estate investment opportunities in the US and in Canada too. Hopefully, my amateur US housing forecasts, predictions and unguaranteed advice will help you find those opportunities for the best upside in cash flow, safety and equity appreciation. Be careful with any investment. Do your due diligence.

If you’re a realtor or real estate investor in Los Angeles, San Francisco, San Diego, Toronto, San Jose, Seattle, Chicago, Boston, New York, or Miami consider my Digital Marketing Services to help you build your realtor brand and and leverage the best sources of real estate leads.  Property investors from around the world are looking to buy. Because I’m an SEO specialist, I can generate real estate leads much more proficiently than lead generation companies. I can help you build a compelling unique value proposition and the highest exposure possible to homeowners and buyers across the US and Canada.  Let’s get your goals accomplished.

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Real Estate Market Forecast Housing Outlook Vancouver 2016

There’s Cause for Optimism in Vancouver and the Rest of BC

bcforestgraphThe irony of it all. BC is now Canada’s economic darling and yet some are complaining (justifiably, those who can’t pay the high rents). The question is whether politicians will try do something negative to spoil this growth.

The BC economy is expected to expand nicely at 2.9% to 3.1% next year. BC exports are growing as new liberal international trade deals are increased and as our loonie keeps falling to .75US.

CMHC believes there will be 30,000 more households in BC next year, and that will support sales of rising new homes being built. Mortgage and borrowing rates will stay low, energy prices will stay low so it’s a superb business situation for BC companies who need the investment money.

bcexportsgraph
Exports to China strong. Growing trade will make Vancouver the key city in Canada in the next 5 years.

BC’s latest jobs report is pretty good too. BC is leading the country with 12,400 jobs added, while the rest of Canada lost jobs. And 2016 has a nice look to it — supporting a healthy real estate sector.

The big controversy is the influx of Chinese investment money into the BC commercial and residential real estate sector. If the Asian markets continue sliding, more rich Chinese will be seeking to park their money in Vancouver and Toronto property. This is a short term financial anomaly that won’t continue so why bother trying to kill it?

September report from RBC paints a rosy picture of BC's growing economic power
September report from RBC paints a rosy picture of BC’s growing economic power

A Better way to Manage the Influx of Billions

Chinese investing in Vancouver
Chinese buyers surfing the Net to find Canadian Properties

There are those who want to end the infusion of investment from Chinese property buyers.

Rather than making these investors use devious ways to buy property here, we could make it easier for them to buy in the Okanagan, Calgary, Edmonton, Regina and Toronto tax-free, since this investment money could go elsewhere instead. We could lose it all.

If Asian buyers can’t buy here, they will choose the US to park their cash. San Diego, Los Angeles, Seattle, Miami and New York are very attractive too. But Vancouver’s better.

A report in the Globe and Mail states:

Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Ltd., estimates that 16 per cent of his firm’s 1,500 sales of detached houses, condos and townhouses within the city of Vancouver last year went to buyers from China. Of his firm’s 544 sales of detached homes in Vancouver proper last year, 150 of the purchasers were from China, or 27.5 per cent.

Another Globe and mail report suggests Chinese sales are aided by a tax loophole that allows them to avoid tax by listing the purchase in the name of a relative.  33% of all these purchases are bought under these circumstances. If this loophole is closed, it could send a shockwave through the real estate market.

Big Sales but fewer Homeowners are Selling

The G&M report also revealed that number of listings in Vancouver has dropped 27% from last year.

In Vancouver, housing starts are expected to grow from 9500 in 2015 to 9600 next year. Resale home sales will rise from $820,000 in 2015 to $835,000 in 2016. According the BC real estate association, the average price of a single detached home will rise from $885,000 currently to $920,000 next year. That’s up more than $100k from 2014.

The GVREB HPI index price for a detached property rose to nearly $1.41 million in Sept 201, up 11.5% from last September.

If the Liberals win the October 19th election, which is very likely, we could see a boost in the economy with them increasing spending.  The latest jobs report is a rise of 73k part time jobs and a drop of 62k in full time jobs.

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