For those looking into the future of the housing market some might notice headwinds in the forecast. Some interesting factors are having an impact on both the residential and commercial sides of the business. Shifts on the economic, political, and physical forefronts have created both short and long-term hurdles for perspective buyers. So what can we expect in 2019? Here are some things you should know.
Customer shopping habits have changed drastically over the last few years. Data from the U.S. Department of Commerce estimated that online sales generated $127 billion in retail revenue – and that was just in the first quarter of 2018. This has created challenges for brick-and-mortar stores, causing store closures and job losses for some – and empty commercial buildings for others. Research shows the national demand for commercial retail space continues to deteriorate as e-commerce soars.
The Federal Reserve has increased interest rates again. This is the eighth increase since 2015. Projections show that in this upcoming year hikes will continue. The new year is expected to begin with rates at approximately five percent and jump to 5.5 percent by the fall. This could make financing a problem for many.
Despite these challenges, there are still many positive signs as we look ahead. One of the biggest indications of a strong housing market is job growth. Seattle’s low supply and a high demand for employees shows no signs of slowing in the upcoming year with employment up 3.6 percent. The city’s retail vacancy rate measured lower than others at 7.8 percent in the second quarter of 2018. Seattle would prove more resilient in than average in an economic decline.
Though interest rates are higher now than they have been in the last few years, they are still at a historical low. As Lennox Scott mentioned in his 2019 housing Forecast, “It’s important to put our current rates into perspective.”