Inventory remains scarce, home prices have the average buyer sweating, a new tax code could cause a stir and politicians are clamoring away in Washington. Yet it’s hard to fret too much when business is booming in what experts are saying could become the longest economic expansion since WWII.
As we start a new year, that’s the sentiment shared among many real estate professionals, who overwhelmingly reported optimism (with some notes of caution) for both the 2018 economy and housing market, a new Inman survey reveals.
Of the 653 economists, developers, agents and owners who participated in Inman’s annual Industry Outlook survey in December, a vast majority — more than 71 percent — stated they were optimistic about the economy going into the new year — a 1 percent increase from the year prior.
“The pent-up desire to spend is again palpable,” commented a New Hampshire broker who reported being “extremely optimistic” about the 2018 housing market, economy and his own personal success next year.
“The banks may successfully lobby to have Congress enact sweeping changes to the CFPB. People are working and spending. I interpret this as a sign of the business pendulum beginning to swing in the direction of irrational exuberance,” he said.
At odds with the positive outlook, however, are rising fears tied to global events, like an intensifying conflict with North Korea and darkening views on how President Trump would impact the housing market, which shifted markedly from a 2017 Inman industry survey.
“Local conditions seem to be positive for strong economy if geo-political events don’t crash into us too harshly,” wrote a Windermere agent in Seattle, who also reported having some concerns about emerging global events but remained on the fence on Trump’s impact.
A bird’s-eye view
Nearly a year after taking office, Trump continues to polarize. But even among his detractors, the commander-in-chief’s outsized personality hardly matters in light of unflappable economic conditions, which have only improved over the past 12 months, many respondents insisted.
Among participants, 30 percent reported being “extremely optimistic” about the economy, and another 41 percent reported being “somewhat optimistic.” Only 2.6 percent reported being “extremely pessimistic,” a 1.3-percent drop from last year, just before Trump took office.
Similarly, 28 percent of respondents reported being “extremely optimistic” about the 2018 housing market, and another 43 percent reported being “somewhat optimistic.” Only 1.9 percent reported being “extremely pessimistic,” a 1.6-percent decrease from last year’s survey.
Among those who reported feeling optimistic about 2018, low interest rates, high demand and robust economic conditions were all cited as reasons to be hopeful, even as uncertainty persists.
“Inventory is low,” said one agent, who also reported holding a negative view of the new tax reform laws while simultaneously harboring goodwill for the president. “Interest rates did not rise over the last two years as predicted. I think this is the most normal the market has been in years. We are back where we were in 2006 as far as values are concerned nationwide.”
Editor’s Note: This survey closed before the final version of the tax bill was released with provisions capping mortgage interest deductions for primary and secondary residences at $750,000 (down from $1 million today), while capping state and local tax deductions (SALT) at $10,000.
In spite of the rosy outlook, respondents were torn on how Trump would impact the housing market next year, with 39 percent anticipating a negative impact and 30 percent a positive impact. An additional 16 percent said he would have no impact on the housing market, and 14 percent admitted that they were undecided.
Check out the full article on InMan News