For over a decade, the real estate industry has been gaining strength. While there has been talks and concerns about a potential real estate bubble, the current real estate trends are showing that the market fundamentals are remaining strong.
In a recent article published by The Motley Fool they state that “Traditionally, real estate follows a cyclical pattern — but the current period has been hard for economists to predict. This has led some people to wonder if we’re facing another housing crash.
Fortunately, the fundamentals this time around are different from those in the mid-2000s. The economy still shows signs of steady growth. The gross domestic product (GDP) is increasing slowly but maintaining its upward trajectory. In the second quarter of 2019, GDP grew 2%. The unemployment rate remains at historic lows and, while wages have been slow to catch up, they’ve started to rise. That has increased consumer confidence and spending.”
Here are five trends to keep an eye on as we head in to the new year according to The Motley Fool:
The forecast for home building
While building has mostly bounced back from the Great Recession, it hasn’t reached the highs seen in 2007. This is good news on one hand, because it means there’s not an issue with oversupply. On the other hand, this lack of building activity has contributed to the lack of inventory and the steady increase in prices.