Buyers and sellers are in for another nail biting year of making predictions regarding the Baltimore metropolitan market. There seems to be a slightly harder road ahead than last year due to the future of the Federal Fund Rate. Interest rates are projected to rise from its current 5% to 5.5% by the end of 2019. The rate hike will be based on data from the overall economy growth. If the economy does not move forward with the growth as expected, the hikes will likely be delayed.
The Baltimore market is projected to have slightly more inventory with an overall 2% increase in housing prices in 2019.. so on the horizon there will be more inventory, higher prices and a raise in rates. This combination is making it more difficult for the first time home buyer to secure a home. Millennials make up the largest demographic of new home buyers which will be heading into a year where home-ownership looks to be a little tougher than the past few years.
There are other factors coming into play this next year on a national level that is new territory for all of us. The tax bill that was passed at the end of 2017 was in effect for the full year of 2018. This reform is new so the outcome is unknown of the positive or negative effects on the 2019 economy. The reform includes changes in standard deductions for married couples and for singles: you’ll need to take a close look at that this year to be sure you will still be itemizing because the standard deduction is much higher. There is also a limited tax advantage on mortgages: mortgage interest is still deductible, at least in principle (pun intended), for the vast majority of homeowners. However, whether they actually receive that deduction or not will depend on a multitude of other factors. This is yet another scenario in the economy that a simple answer does not apply.
On a more local level, the economy of the Baltimore Metropolitan area (in part) will soon feel the benefits of the recent decision of the new Amazon Headquarters in northern Virginia. The second Amazon headquarters is going to go by “HQ2.” The company says that this won’t be a satellite facility, but rather an equal to its current headquarters in Seattle, Wash. It also notes that it will be investing $5 billion into its creation. Located approximately 30 miles outside of Washington DC, Loudoun County is part of a burgeoning tech corridor. The employees would live in Loudoun County or commute from one of the surrounding counties, Maryland (directly to the north), or West Virginia (due west). So with the influx of jobs and the need for housing the opportunities for an economic boost for the Baltimore area looks to be quite positive.
The economy is multi-faceted, multi layered, temperamental and always changing; home prices follow this trend. Robinson Appraisal Group can offer you their services on determining the value of your home in an ever-changing climate. We offer home appraisal services in Baltimore County, Baltimore City, Harford County, Howard County, Carroll County, Anne Arundel County and Cecil County.