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Housing in 2020: Construction Costs Grow, Mortgage Rates Slow

Aug 26, 2018 by

Where will housing be in 2020? According to the latest Metrostudy predictions, if all continues on its current track, construction costs could continue to increase, and mortgage rates could reel in.

While rates have increased in the last six months, impacting affordability, the rise is not significant according to historical trends, says Mark Bound, chief economist and senior vice president at Metrostudy, a provider of primary and secondary market information to the housing and residential construction industries. In the long term, Boud predicts mortgage interest rates will top out at 5.8 percent in 2020 and 2021, eventually being pulled down by slower economic growth—and because of tighter lending practices, the market environment will not become as dire as the last housing bubble.

As for inventory, it is significantly under-supplied, while homes are increasingly overvalued; however, the risk of a price collapse is small due to the tight market, and Boud expects the cycle of under-supply to plateau in 2020. The lack of new inventory is, in part, in response to trade increases, as many of the imposed tariffs—specifically the 20-plus percent tariff on lumber imports, and 10 and 25 percent tariffs on aluminum and steel imports, respectively—directly impact construction efforts.

These factors could lead to an increase in overall construction timelines, as well as an increase in construction costs by at least $ 2,000 per house, according to Boud. More homes in the upper price ranges are being built, while inventory under $ 400,000 is lower, in some cases. Overall, the national market is becoming top-heavy, which typically only occurs where land is more expensive, such as in California, Boud says.

Remodeling activity continues to rise in response to homeowners staying in their homes for longer, as well as the continuing trend toward purchasing existing homes, which triggers renovations. According to Boud, this is most common in coastal markets, or markets that have high appreciation rates, such as Texas.

Something to watch? Inflation. Boud says inflationary pressures are slowly building—inflation rose from 2.4 percent in March to 2.9 percent in August—but in a few years, the national debt could slow economic growth, which, in turn, could slow down rising interest rates.

Another concern? The current downward trend of the 2-10 Treasury yield spread, which could see negative figures in about a year, may be a sign that a recession is in the cards.

However, the current economy is healthy, Boud says. In the past 12 months, 2.4 million jobs have been generated, increasing demand for housing and pushing the unemployment rate down. Additionally, housing starts are fairly stable, forecasted to be 1.28 million in 2018, and increasing to 1.33 million in 2019 and 1.345 million in 2020, before plateauing.

Dominguez_Liz_60x60_4cLiz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Housing in 2020: Construction Costs Grow, Mortgage Rates Slow appeared first on RISMedia.

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Learn, Grow, READ

Feb 6, 2016 by

Computer ReadingI facebook for at least an hour every morning. There. I said it. Now you know my little secret. Go ahead, roll your eyes. Scoff. Make jokes about how I must love to be up on all the latest gossip and goings-on with my 300+ friends.

The truth is, I quickly skim through the friend posts, push “like” on a few, (work that database!), share the occasional short posts that my page audience might like, and keep going until I get to the reason I’m actually there: Articles.

I read a lot of articles on Facebook. Admittedly, it is where I get almost all my news, tips and ideas. I am constantly reading articles from organizations like National Association of Realtors, Realtor Magazine, HouseLogic, The Mike Ferry Organization, Lighter Side of Real Estate, National Real Estate Post, and KCM Crew, as well as catching up on any relevant local news from our tv stations and newspapers. Basically, I am always reading, watching, and learning.

Why?

Back in 2008, a lender was talking with me about the recession we were in. My knowledge was limited, so I asked him how he knew everything he was telling me. He mentioned a show called Think Big Work Small. “It’s kind of like Car Talk– laid back, funny and informative- but for lenders and Realtors.” I googled it, watched it, loved it, subscribed and have not missed a show since.reading-ignorance

What I noticed after watching the TBWS (now National Real Estate Post) episodes was that I learned things that carried into conversations with clients. Suddenly, I was sounding smarter, more knowledgeable, and more professional. I felt pride in the fact that as a relatively new agent, I could hold my own with the business people I encountered. I loved that I actually had something to say instead of feeling like everyone was above my knowledge level.

Now that I’m a manager, I’ve realized just how important that skill has been to not only help grow our company, but also to give our agents confidence when out in the field. I encourage the agents by sharing articles, discussing new ideas and tips, and relaying beneficial information. We watch videos, listen to podcasts, attend conferences and classes, and immerse ourselves in our industry.

Knowledge truly is power. If you don’t read and learn about your profession, you are never going to grow. You are never going to be any more than what you are today.

If that’s not okay with you, then take the time to invest in your career. Take the time to get educated. And most importantly, take the time to READ.


Amy Gilpin RealtorAmy Gilpin Associate Broker, Manager, ABR.

Fourteen years of helping clients. Six years of helping agents. All for this crazy thing we call real estate.
Production Realty 517-879-4141 Jackson, MI Amy@ProductionRealty.com

The post Learn, Grow, READ appeared first on National Real Estate Post.

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Grow Your Online Authority in 2016 with Your Free Realtor.com® Profile

Jan 3, 2016 by

Build your market authority and relevancy with a fully completed realtor.com® profile, including recommendations and referrals. Learn more. More news from realtor.com®: New realtor.com® Agent Profiles Help Promote Agents’ Personal Brands in 2016 With 2015 officially in the rearview mirror, it’s likely that you’re hyper-focused -like many agents and brokers – on how to grow […]
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Tips to Grow Your Real Estate Business and Still Have a Life

Oct 8, 2015 by

Want to be successful in real estate and not have to work 60-70 hours each week? That’s the focus of the most recent Secrets of Top Selling Agents webinar, “Build a Big Business in a Short Amount of Time and Still Have a Life,” featuring Wendy Papasan. In the webinar, Papasan explains how she and […]
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