{"id":62,"date":"2020-01-07T19:05:33","date_gmt":"2020-01-07T19:05:33","guid":{"rendered":"http:\/\/tomweeks.net\/wordpress1\/?p=62"},"modified":"2021-02-10T19:11:53","modified_gmt":"2021-02-10T19:11:53","slug":"2020-outlook-real-estate-market-forecast","status":"publish","type":"post","link":"http:\/\/tomweeks.net\/wordpress1\/2020\/01\/07\/2020-outlook-real-estate-market-forecast\/","title":{"rendered":"2020 Outlook: Real Estate Market Forecast"},"content":{"rendered":"\n
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We\u2019re in the midst of the longest economic\nexpansion in U.S. history, and economists think there\u2019s still room to grow. A\nrecent survey by the National Association for Business Economics found that\nexperts believe the U.S. economy will remain positive throughout 2020.1<\/sup><\/p>\n\n\n\n

Still, given that recessions are a natural\n(and necessary) part of a business cycle, we know this period of growth will\ninevitably end. So you may be wondering \u2026 how will an eventual recession impact\nthe real estate market?<\/p>\n\n\n\n

Many Americans assume a recession would lead\nto a decline in housing prices like we saw during the Great Recession of 2008.\nBut the real estate market crash we experienced wasn\u2019t typical. In fact, the\nlast recession wasn\u2019t typical at all. It was the worst economic downturn since\nthe Great Depression of the 1930s.<\/p>\n\n\n\n

ATTOM Data Solutions analyzed real estate\nprices during the last five recessions and found that, in the majority of\ncases, home prices actually went up. Only twice (in 1990 and 2008) did prices\ndecline, and in 1990 it was by less than one percent.2<\/sup><\/p>\n\n\n\n

So what can historical precedent\u2014combined with\ntoday\u2019s data\u2014tell us about the future of real estate? Here\u2019s where experts\npredict the housing market is headed in 2020 and beyond.<\/p>\n\n\n\n

HOME\nPRICES WILL KEEP RISING<\/strong><\/p>\n\n\n\n

Economists predict U.S. housing prices will\ncontinue to rise, regardless of a recession. In fact, property data firm\nCoreLogic forecasts a faster rate of growth for home prices in 2020 than we saw\nin 2019, with the biggest gains at the lower end of the market.3<\/sup><\/p>\n\n\n\n

Arch MI Chief Economist Ralph DeFranco expects\nentry-level home prices to increase faster than incomes this year, making it\neven more difficult for many first-time buyers to afford to enter the market.4<\/sup><\/p>\n\n\n\n

\u201cLow interest rates and a shortage of starter\nhomes will continue to push up prices,\u201d predicts DeFranco. \u201cThis is especially\nthe case for lower price points, since builders have tended to focus on more\nexpensive, higher-profit houses and less on replenishing low inventories of\nentry-level homes.\u201d4<\/sup><\/p>\n\n\n\n

\u201cReal estate is on firm ground with little\nchance of price declines,\u201d said National Association of Realtors Chief\nEconomist Lawrence Yun. “However, in order for the market to be healthier,\nmore supply is needed to assure home prices as well as rents do not consistently\noutgrow income gains.\u201d5<\/sup><\/p>\n\n\n\n

What\ndoes it mean for you?<\/strong> If you have the ability and\ndesire to buy a home now, don\u2019t let a fear of recession or falling prices hold\nyou in limbo. Economists expect home values, as well as rent prices, to\ncontinue rising. So you\u2019ll likely pay more the longer you wait.<\/p>\n\n\n\n

INVENTORY\nCONSTRAINTS WILL CONTINUE<\/strong><\/p>\n\n\n\n

According to Redfin, Americans are staying in\ntheir homes longer. In 2019, the average homeowner had resided in their home\nfor 13 years, up from just eight years in 2010. That means there are fewer\nhomes available today for those who want to buy.6<\/sup><\/p>\n\n\n\n

It\u2019s possible that an increase in new\nconstruction could offer some relief. The National Association of Realtors\n(NAR) expects single-family housing starts to total one million this year, the\nhighest level since 2007. And NAR Chief Economist Lawrence Yun predicts the\naverage price of new construction will decline slightly as builders shift to\nbuilding smaller, more affordable homes.7<\/sup><\/p>\n\n\n\n

However, these efforts may not be enough to\nmeet current demand.\u201cDespite improvements to new construction and\nshort waves of sellers, next year will once again fail to bring a solution to\nthe inventory shortage,\u201d predicts Realtor.com Senior Economist George Ratiu.\n\u201cIn 2020, we expect inventory to struggle to grow and could instead reach a\nhistoric low level.\u201d8<\/sup><\/p>\n\n\n\n

What\ndoes it mean for you? <\/strong>If you\u2019re looking to buy a\nstarter home, be prepared to compete for the best listings. Start your search\nearly, and if you\u2019re up against a deadline (like a new baby), build in plenty\nof time to find the right home. We can help you assess your options, including\nnew construction and up-and-coming developments.<\/p>\n\n\n\n

MORTGAGE\nRATES WILL REMAIN LOW<\/strong><\/p>\n\n\n\n

Mortgage rates have declined more than a full\npercentage point since November 2018, when they hit a recent peak of 4.94%.9\n<\/sup>The Mortgage Bankers Association predicts rates will remain low, at\naround 3.7%, through mid-2021.10<\/sup><\/p>\n\n\n\n

While it may not seem significant, on a\n$200,000 30-year fixed-rate mortgage, that lower rate means buyers could save\naround $145 on their monthly payment and more than $52,000 over the life of\ntheir mortgage. Lower mortgage rates make homeownership more accessible and\naffordable for buyers.<\/p>\n\n\n\n

Although economists expect mortgage rates to\nstay low, they caution against waiting to act. Economic factors, shifts in\nsupply and demand, or unforeseen impacts of the November election could cause\nrates to rise unexpectedly. \u201cWe recommend borrowers with long-term plans of\nstaying in their homes to lock in a low rate now because there\u2019s no telling how\nlong these low rates will last,\u201d warns Preetam Purohit, a capital markets\ntrader at Embrace Home Loans.11<\/sup><\/p>\n\n\n\n

What\ndoes it mean for you? <\/strong>If you\u2019re looking to buy a home,\nact soon to lock in a historically low mortgage rate. It will minimize your\nmonthly payment and could save you a bundle over the long term. And if you plan\nto stay in your current home for a while, consider whether it makes sense to\nrefinance your mortgage at today\u2019s lower rates.<\/p>\n\n\n\n

MILLENNIALS\nWILL DRIVE THE MARKET<\/strong><\/p>\n\n\n\n

Millennials are expected to account for more\nthan half of all mortgages this year, outnumbering Generation X and Baby\nBoomers combined. It\u2019s not surprising, considering their age and stage of life.\nIn 2020, the largest cohort of millennials will turn 30, and the oldest\nmillennials will turn 39.8<\/sup><\/p>\n\n\n\n

“Family changes tend to drive home-buying\ndecisions,” explains Realtor.com Chief Economist Danielle Hale.\n“Millennials are going to be active in the housing market not just because\nthey’re just at the age when they’re thinking about becoming first-time home\nbuyers, but they’re also in the age range when they’re having kids.”12<\/sup><\/p>\n\n\n\n

Younger millennials flocked to urban centers\nthat offered easy access to work, shopping, and restaurants. But high prices,\nlack of square footage, and subpar schools are driving millennials out to the\nsuburbs as they begin to marry and expand their families. <\/p>\n\n\n\n

In response, a new model for suburban living\nhas emerged. \u201cHipsturbias,\u201d or mixed-use communities that bring the\nlive\/work\/play concept to the suburbs, were recently named one of the top real\nestate trends for 2020 by the Urban Land Institute.4<\/sup><\/p>\n\n\n\n

What does it mean for you?<\/em><\/strong> <\/em>If\nyou\u2019re a millennial who has been priced out of urban living or is looking for\nmore space for your growing family, a number of suburbs in our area have a lot\nto offer. We can point you towards the communities that will best meet your needs.\nAnd if you\u2019re a homeowner with plans to sell, give us a call. We know how to\nmarket your home to millennials \u2026 and can help you sell quickly for top dollar\nby appealing to this leading market segment!<\/p>\n\n\n\n

WE\u2019RE\nHERE TO GUIDE YOU<\/strong><\/p>\n\n\n\n

While national real estate numbers can provide\na \u201cbig picture\u201d outlook, real estate is local. As local market experts, we can\nguide you through the ins and outs of our market and the issues most likely to\nimpact sales and home values in your particular neighborhood. <\/p>\n\n\n\n

If you\u2019re considering buying or selling a home\nin 2020, contact us now to schedule a free consultation. We\u2019ll work with you to\ndevelop an action plan to meet your real estate goals this year.<\/p>\n\n\n\n
START PREPARING TODAY<\/strong>
If you plan to BUY this year:<\/strong> Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What\u2019s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you. Come to our office. The buying process can be tricky. We\u2019d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today! <\/em> <\/strong>

If you plan to SELL this year:<\/strong> Call us for a FREE Comparative Market Analysis.<\/em> A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you\u2019re ready to list. Prep your home for the market.<\/em> Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results. Start decluttering.<\/em> Help your buyers see themselves in your home by packing up personal items and things you don\u2019t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage. and get you one step closer to moving when the time comes! <\/td><\/tr><\/tbody><\/table>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

Sources:<\/p>\n\n\n\n

  1. NBC News –
    \nhttps:\/\/www.nbcnews.com\/business\/economy\/what-impending-recession-new-survey-shows-most-people-think-they-n1098511<\/a><\/li>
  2. Curbed –
    \n    https:\/\/www.curbed.com\/2019\/1\/10\/18139601\/recession-impact-housing-market-interest-rates<\/a><\/li>
  3. HousingWire  –
    \n    https:\/\/www.housingwire.com\/articles\/corelogic-expects-home-prices-to-do-this-in-the-next-12-months\/<\/a><\/li>
  4. Forbes –
    \n    https:\/\/www.forbes.com\/sites\/alyyale\/2019\/11\/15\/2020-housing-outlook-expert-predictions-for-mortgage-rates-home-prices-tech-and-more\/#343ea4522935<\/a><\/li>
  5. National Association of\nRealtors –
    \n    https:\/\/www.nar.realtor\/newsroom\/expect-continued-economic-growth-slower-real-estate-price-gains-and-small-chance-for-recession-in<\/a><\/li>
  6. Redfin –
    \n    https:\/\/www.redfin.com\/blog\/homeowners-staying-in-their-homes-longer\/<\/a><\/li>
  7. HousingWire –
    \n    https:\/\/www.housingwire.com\/articles\/builders-are-coming-to-the-housing-markets-rescue\/<\/a><\/li>
  8. Realtor.com –
    \n    https:\/\/www.realtor.com\/research\/2020-national-housing-forecast\/<\/a><\/li>
  9. YCharts –
    \n    https:\/\/ycharts.com\/indicators\/30_year_mortgage_rate<\/a><\/li>
  10. MBA Mortgage Market Forecast\nNovember 2019  –
    \n    https:\/\/www.mba.org\/news-research-and-resources\/research-and-economics\/forecasts-and-commentary<\/a><\/li>
  11. Dallas Morning News –
    \n    https:\/\/www.dallasnews.com\/sponsored\/real-estate\/2019\/11\/23\/experts-predict-where-mortgage-interest-rates-land-in-2020\/<\/a><\/li>
  12. Realtor.com –
    \n    https:\/\/www.realtor.com\/news\/trends\/biggest-changes-coming-in-2020-real-estate-and-tips-for-buyers-and-sellers\/<\/a><\/li><\/ol>\n","protected":false},"excerpt":{"rendered":"

    We\u2019re in the midst of the longest economic expansion in U.S. history, and economists think there\u2019s still room to grow. A recent survey by the National Association for Business Economics found that experts believe the U.S. economy will remain positive throughout 2020.1 Still, given that recessions are a natural (and necessary) part of a business […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6,17,16,7],"tags":[13,9,18,21,20,19,5],"_links":{"self":[{"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/posts\/62"}],"collection":[{"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/comments?post=62"}],"version-history":[{"count":2,"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/posts\/62\/revisions"}],"predecessor-version":[{"id":65,"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/posts\/62\/revisions\/65"}],"wp:attachment":[{"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/media?parent=62"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/categories?post=62"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/tomweeks.net\/wordpress1\/wp-json\/wp\/v2\/tags?post=62"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}