Patrick Stone, president and CEO of title insurer Williston Financial Group offered a surprisingly sunny assessment of the near-future real estate market.
Perhaps you have maybe heard that the market is turning? And that 2019 is going to be a sad year with fewer home sales?
Well Patrick Stone, president and CEO of title insurer Williston Financial Group, disagrees. And he offered a surprisingly sunny assessment of the near-future real estate market.
“I do think we’ll see the return of the first time homebuyer,” Stone told a gathering of real estate professionals at Inman CEO Connect Tuesday morning. “You are in the right industry for the next three to five years.”
Stone’s assessment hinges on a handful of economic trends he thinks will buoy the real estate market beyond some of the more dire predictions that have captured recent headlines. First, Stone said that home appreciation is slowing while wages are, finally, catching up.
“We are closing the affordability gap at a noticeable rate,” Stone said.
That’s a significant trend, given that buyers in many coastal markets have been pushed out of their cities by years of price inflation and wage stagnation. And the result, he argued, was that in 2019 there will be “more mortgages made for resales this year than last year.”
“By the second half of this year I think you’re going to see a fairly significant surge in new home buying,” Stone added.
To prove his point, Stone cited his own company, which has seen a 24 percent jump in orders this month compared to December 2018. He described that jump as the largest December-to-January change that he has seen in 43 years.
“I’m optimistic,” Stone concluded from those numbers.
Stone is also optimistic about the real estate market’s health because, he argued, there should be 16 million new home buying households forming in the next five years. Those households — created as more millennials come of age — represent the largest generation since the baby boomers and should drive significant demand for real estate. Stone also pointed out that the U.S. still isn’t building as many houses as there are people reaching home buying age, meaning demand should exceed supply and prices should go up.
“This is a population bubble coming,” Stone said.
Stone argued that there is not currently a housing bubble, and that “we are not in a speculative economy.” And while there are reasons to be generally cautious — for example he said there is a corporate lending bubble — the real estate market remains poised to thrive in the coming years.
“It’s a good business to be in,” Stone said.