Recap of 2018 and Predictions for 2019

By Cara Brenza, qualifying broker Realty One, Cedar Crest

Marked by low mortgage rates and high consumer confidence, the 2018 real estate market was a strong one, offering benefits to both buyers and sellers. Here in the East Mountains, more than 580 single-family homes hit the market in 2018, with an average selling price of $274,803, up from $265,430 in 2017—a 3.4 percent increase compared to 2.68 percent for the entire market area, including Albuquerque.

Homes for sale in 2018 also spent fewer days on the market, with 48 percent selling in less than 30 days. Furthermore, many homeowners who bought at the height of the real estate market boom in 2008 and then suffered through the downturn of the proceeding years have now recovered their equity.

Here is what I predict for 2019:

Mortgage rates will continue to rise, possibly reaching as high as 5.8 percent for a 30-year fixed mortgage. In spite of those rates, millennials in their late twenties and early thirties will continue to comprise the greatest segment of homebuyers—45 percent compared to 37 percent for GenXers and 17 percent for Baby Boomers.

Nationally, overall sales will drop in 2019, probably by around 2 percent, but we are optimistic about how things will go here in New Mexico, which seems to feel real estate trends later than most of the rest of the nation. Home price growth will still show appreciation, though, probably around 3 percent, due to less competition and fewer new home starts. While home affordability will continue to be a big factor in the 2019 housing market, early signs point to an improving home inventory situation, including in several markets that are beginning to show regular year-over-year percentage increases. As motivated sellers attempt to get a jump on annual goals, many new listings enter the market immediately after the turn of a calendar year. If home appreciation falls more in line with wage growth, and rates can hold firm, consumer confidence and affordability are likely to improve.