Hi everyone! TheStreet.com recently posted an article talking about what industry experts are predicting for the 2020 U.S. real estate market. Time is precious, so we’ve summarized most of that article in a shorter post for you:
1. Inventory will decrease again
2. Millennials Will Be Huge Buying Demographic
• Over 50% of mortgages taken out will be by Millenials, as the oldest of the generation approach 40.
• Looking for ~1,800 SqFt Homes in the suburbs.
3. Home Prices Will “Flatten.”
• U.S. home prices will only increase by 0.8% nationwide.
• Prices will decline in more than 25% of the 100 largest metro areas.
4. The Housing Market Will Be “More Competitive.”
• Housing cool down that started in 2018 will end.
• Market has stabilized, and inventory is low, meaning prices and economic strength will cause homeowners and builders to list homes.
5. Southeastern U.S. in High Demand
• Southeastern U.S. has affordable housing, and people will chase that as job opportunities increase.
6. Bidding Wars
• Thanks to low mortgage rates and low inventories, sellers can expect bidding wars.
• One of every four offers placed will be involved in a bidding war.
7. Mortgage Rates Stay Low
• Rates will float at 3.8%.
• Housing market is strong, but industries like manufacturing are pulling the economy down and keeping rates affordable.
8. Mortgage Rate Decline Should Be Temporary
• Mortgages rates will increase again.
• Housing demand will be effected by things other than rates, such as affordability versus household income.
8. Potential Recession Will Barely Effect Housing Market
Prediction: Arch Capital Services, Dr. Ralph G. DeFranco
• If an economic slowdown does occur, the housing market will weather the storm.
• Low inventory is protecting the housing market, unlike past recessions.
9. Climate Change Is Now a Buying Factor
• Insurance rates are increasing in areas that experience more and more natural disasters.
• If disasters are frequent enough, insurance companies may not offer homeowners insurance for certain areas, which will make securing a mortgage impossible.
10. Overall, U.S. Home Values to Rise in 2020
Prediction: Windermere Real Estate, Seattle
• Expects U.S. home prices to increase 2.9% nationwide.
• Demand from first-time buyers will be driving factor.
Want to know what’s happening locally with your home instead of nationally? Reach out to us here at the DiMora Team and we’re happy to assist you.
For full original article: https://www.thestreet.com/personal-finance/real-estate/2020-real-estate-predictions