Predicting what the coming year will bring is a tricky endeavor. What follows is our best guess for 2026 based on local market conditions, agent sentiment and lender expectations...with a little "gut instinct" (based on 25+ years of experience!) thrown in.
2026 looks to be a banner year in real estate! There. I've put it out there.
But why, you ask? Excellent question! A number of factors appear to be converging that lead to this conclusion. Among these:
Mortgage interest rates have dropped about 1% from a year ago and are expected to drop another 0.5ish% over the course of this year. Furthermore, most buyers have come to grips with interest rates floating around 6% and are no longer waiting for the halcyon days of 3% rates to return. Lower mortgage interest rates drive greater buyer engagement.
Expanding upon the first bullet, a portion of buyers pressed the pause button on buying over the last several years. Our feeling is that 2026 will be the year that many of these buyers will decide that they have waited long enough to become homeowners.
Buyers were not the only ones to press the pause button. Many wannabe sellers over the last few years held off on selling because they didn't want to lose their historically low mortgage rates - but many of these sellers, are getting antsy to sell. 2026 will likely see a portion of these flexible sellers listing their homes for sale.
There is a possibility that the capital gains exclusion for homeowners could be increased from the current $250K/$500K single/married levels. If this happens, it is expected to free up more housing inventory as homeowners who were reluctant to sell because of substantial negative tax consequences will look to sell if their tax burden is substantially relieved/eliminated.
The above conditions definitely point to 2026 being a very strong year in real estate. If the past is any indicator, buyer demand for homes will continue to outstrip supply, keeping us squarely in a seller's market.
There are, of course, natural and human-generated events that could render our prediction exactly wrong. Just last year, "Tariff Liberation Day" (April 2) effectively froze the real estate market for some 4-6 weeks. And lest we forget, it was not that long ago that both Covid and the Great Recession haunted real estate and the economy in general for extended periods of time. Still, we expect 2026 to be a banner year in real estate!
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