Matthew Gardner, Windermere’s chief economist and someone we trust to provide an unvarnished look at upcoming market expectations, has published his 2019 forecast in the Seattle Business Magazine. You can read the full version HERE, and we’d encourage you to do so. That being said, we’d also like to specifically highlight his thoughts on the real estate market.
While Matt sees some strong market fundamentals, including a strong labor market and continued free trade agreements, he is forecasting an upcoming recession in late 2019 or 2020 due to a flattening treasury yield curve and the expectation of the Federal Reserve raising short-term rates multiple times this year.
However, unlike the 2007/2008 recession that was spearheaded by a decline in the housing market, his expectation is for continued – if decelerated – growth. Rising rates will impact affordability and appreciation will slow as housing supply is predicted to swell, but a strong labor market, continued migration into the Pacific Northwest, and rates that are still historically low will keep the overall housing market strong. Matt does caution that the frantic growth of the last half-decade may not continue, and expectations will have to be recalibrated accordingly, but demand will remand strong even as supply continues and we move towards a more balanced market.