I received the information below about what the 2020 real estate market might look like and why according to real estate expert, Joe Sesso, reporting about what other real estate experts believe. It came to me by email from my real estate company, Long & Foster Real Estate, via RISMedia, both of which keep us realtors informed on a regular basis. I thought it was good information and decided to share it with you.
By Joe Sesso, National Speaker and Author for Homes.com:
While it's most important to know what's happening in your
area, it's also a good idea to have a general overview. In the most recent
Secrets of Top Selling Agents webinar, Steve Harney shares what experts are
saying about this year's real estate market in "2020 Market Predictions
for Real Estate."
After being in the industry for over 25 years, Harney is a
residential real estate expert who specializes in market trends. He started as
an agent and then developed his own 500-agent real estate firm.
Currently, Harney works with producers to help them achieve
success. He is often quoted in major news sources and is recognized as one of
the most accurate market trends predictors today.
What does
the market look like?
The housing market is a solid foundation for the U.S.
economy going into 2020. In addition to this, home sales are projected to
increase substantially in the coming year. This can be seen in the recent
report from Time which showed an increase in buyer traffic, increasing by 12.6
percent nationwide. If you're in the West, you probably saw a good year, with
activity jumping 23.1 percent.
When thinking about when to make your next push in the
industry, do not to wait until spring when most of the competition will also be
out. Instead, he recommends starting now, since buyers are already flooding the
market.
What is
influencing these changes?
According to Freddie Mac, mortgage rates should remain low
throughout 2020 and 2021, averaging around 3.8 percent. Fannie Mae, the
Mortgage Bankers Association and the National Association of REALTORS® all also
believe rates will remain under 4 percent through 2020. This means the market
won't be facing any resistance like what was seen at the end of 2018 when rates
increased. Harney refers to this as a "perfect buying environment."
Because there will be a greater influx of buyers and higher
demand for homes, CoreLogic predicts that home prices will rise at least 5 percent
over the year. Similarly, home value is expected to continue to appreciate.
This is due to an inventory shortage and a high demand from buyers. In fact, in
2019, housing inventory dropped overall by 12 percent, while homes available
for less than $200,000 dropped by 18 percent. This poses a challenge,
especially since millennials and Generation X buyers are flooding the market,
looking for low-cost homes. Harney says the best way to avoid issues with this
is by listing properties as soon as they become available, especially if
they're in the lower price range.
Will there
be a recession?
A recession is defined as a temporary economic decline
during which trade and industrial activity decrease. While some experts expect
a recession during 2020, others do not.
It's important to keep in mind that a recession does not mean a housing
crisis. In fact, a housing slowdown is one of the bottom five possible triggers
of a recession.
Will home sales would be affected by the 2020 election?
Harney explained that, yes, there may be a slight decrease in home sales during
that time. However, it's not due to a lack of buyers. Instead, it's because
people are distracted by the election and put off buying. As a result of this,
generally, home sales the following year are expected to significantly
increase.
