The Divide of the Housing Market and Why an Even Wider Gap is Coming Next Year
Summary
The U.S. housing market is bifurcating, with strong demand expected in second home and short-term rental hubs, while other areas may see flat or declining prices. Hosts should focus on hyper-local market conditions and financing options to make successful investment decisions in 2026 and beyond.
Key Insights
- •Homes priced over $1 million saw a year-over-year jump of more than 16%, and properties between $750,000 and $1 million rose 10%.
- •Our forecast for 2026 and 2027 is for the luxury single-family, second home, and short-term rental markets to be exceptionally strong as a result of tax incentives (like the STR loophole), diversification and profit-taking from equities, and an anticipated reduction in mortgage rates amid the end of quantitative tightening (with the potential for easing).
Action Items
- ✓For markets on your radar, consider aggressive negotiations and incentives beyond price such as furnishings and seller concessions.Effort: mediumImpact: medium
- ✓In strong markets, make the effort to tour prime listings as close to coming to market as possible and be decisive.Effort: mediumImpact: medium
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