January 4, 2019
For new home buyers, avid property investors or apartment renters, 2019 is already shaping up to be a busy year in real estate. But this means that it will be even busier for the professionals behind it who will keep it running.
Real estate agents, property appraisers, mortgage brokers and title agents will have their hands full more than usual in 2019 as the market is set to become more active. Already, forecasters are determining the power will be back in the buyers’ hands, and just like with any shift in power, it’s important for real estate professionals to be ready for what lies ahead.
No matter the kind of market, whether it’s for buyers or sellers, insurance plans for real estate professionals will always be needed. Those in the real estate business must make sure they are covered in the event of a loss, error or omission, or even a slip and fall. People will still be looking into buying homes or selling them, so protecting your assets with the right real estate business insurance will keep you safeguarded.
Business insurance in the real estate professional market is important to have on hand as the market may swing overnight and buyers may be ready to look at new properties, which means you must be ready for things like clerical errors. Having the right business coverage will add peace of mind during busy and slow seasons.
When it comes to homebuying, the conversation tends to weigh heavily on rising interest rates. Mortgage rates are at their highest mark since 2011, and while this indicative of a thriving economy, the change has a lot of potential homebuyers hesitating.
The Federal Reserve hiked up the interest rates three times throughout 2018 and a fourth is likely to come early in 2019, with more in the barrel. These types of changes could be detrimental to a homebuyer’s decision to dive in, which means it will be a competitive market for real estate professionals. The majority of homebuyers won’t be too far out of range, however, to still afford buying a home, even with higher rate hikes. While interest may seem higher, the difference may come down to an extra $100 or so on the mortgage.
With the decline in active buyers predicted, there will likely be a slowing growth of home prices across the country. Home prices have outpaced wage growth in many major markets in recent years. That growth will continue to slow and possible level out in certain areas like smaller metro areas.
Altogether, homeowners looking to sell their property may be reluctant to put their property on the market due to having to purchase a new house for themselves. Consumers can expect continued low inventory of houses while buyers and sellers try to maneuver around new and fluctuating rates.
Those who have been renting for some time may stay with the theme of hesitating a little bit longer and keep renting as they see rises and movements in rates and low inventory. In some markets, this is great news for landlords who won’t have to worry about increased vacancies.
If homes return to being bought up at a higher clip, renters can expect to benefit from declining rental demand. Rising homeownership rates are great for renters as there will be fewer fellow renters to compete with and may encourage more bargaining power when it comes to things like concessions, free months’ rent or amenities.
No matter what kind of market it is, renters will continue to save as much as possible while wages are continually on the rise and the job market gains more in robustness.
Altogether, real estate professionals should keep their finger on the pulse of a testy market that is dependent upon a number of moving parts and variables that all seem to be coming to a head in 2019. From rising rates to low inventory, there are a number of things to consider.
About Associations Liability Insurance Agency (ALIA)
The ALIA Team (part of the Riverton Insurance Agency Corporation), specializes in helping real estate professionals find the affordable and comprehensive coverage they need, without the hassle. ALIA dates its roots to 1991 with the founding of FREA, Foundation of Real Estate Associates. In 2013, ALIA was created to work with multiple insurance companies thereby broadening the portfolio of products to customers. In 2017, ALIA was purchased by Riverton Insurance Agency Corp.