Over five million existing homes sold in the United States in 2019. With the year drawing to a close, people are beginning to turn their sights to what 2020 may bring.
Will recession be a hot topic next year? Will home buyers still enjoy increasing home prices? Will young people keep demand for houses up?
All of these questions and more are things that our team set out to answer for the purpose of constructing this article. Based on our research, we’ve come up with some expert-backed predictions for next year’s housing market that home buyers and sellers alike should be privy to.
Here is our housing market forecast for 2020:
1. Young People Will Drive Sales
If you’re selling a house next year, expect to see a lot of young couples walking through your doors during open houses. Today, the average millennial is pushing into their late 20’s which means that they’ve got money in their pocket and the urge to start building families.
Consequently, we’ll see millennials driving the housing market more than any other group.
Make sure that your home’s staging is set up to make an impression on this unique class of buyer whose tastes may directly foil your own.
2. More Homes Will Hit the Market
There’s a lot of talk about recession going on right now. Many people’s primary housing market forecast question, consequently, is whether or not recession will hit hard in 2020.
Predictions on this front vary.
What we think will happen is that housing prices will continue to grow, albeit, at a slower rate than they grew 2019. Despite that upwards movement, many homeowners are going to fear getting stuck with a depreciating asset which will drive them to put their homes on the market.
3. Sales Will Outpace 2019 but Prices Might Not Impress
We don’t think that you’ll have a problem selling your house in 2020. The demand will still be there, as we mentioned, thanks to young buyers wanting to start putting down roots.
Unfortunately, high amounts of inventory and recession talk will make buyers a lot pickier when it comes to how much they’re willing to pay. While the average price of houses across the country will likely rise in 2020, you may not walk away with as big of a payout as you were hoping for. If you live in a high-inventory community, you may even walk away with less than you would have if you sold in 2019.
4. Lower Interest Rates Will Help Demand
Interest rates are historically low on home purchases in the United States. As of right now, they’re below 4%. Compare that to 14% in the 80’s.
When interest rates are low, home buyers are able to earn discounts on houses without sellers needing to inconvenience sellers. That’s great news for both parties and compels more inventory to hit the market and more buyers to purchase that inventory without aggressively negotiating.
5. Developing Markets Will Start to Flourish
A lot of young people dream of living the life of luxury in big markets like Los Angeles and New York. What many are realizing is that those places represent a bad value and are overrated from a livability perspective.
Consequently, we think that burgeoning real estate markets in places like Tallahassee and Grand Rapids are going to start seeing an influx of young professionals moving into the area. That could mean that purchasing investment houses in these places could be a lucrative investment.
6. Suburban Developments Will Continue to Rise
As we said in our last point, people’s love affairs with big city life will start to dwindle in 2020. This trend is going to drive more people into the suburbs which will then prompt suburbs to make infrastructure developments.
Expect to see more luxury apartments going up, more sidewalks installed and more retail spaces being developed.
7. Senior Housing Will Continue to Heat Up
It’s no secret that the United State’s senior population is going to hit a critical point in the year 2035. The number of seniors is expected to reach 78 million, to be exact, which is nearly a third of the population.
To accommodate all of those people, more real estate professionals are going to make investments in senior housing in hopes of increased demand driving up the sale/lease of these properties.
You can expect to see senior housing being built in and around your community in 2020.
8. Recession Talks Will Increase
Big real estate entities like Zillow predict that the housing market recession will hit hard in 2020. While most people don’t have as pessimistic of a view as Zillow, you can expect conversations surrounding housing recessions to pick up pace during the year and to come to a boil in 2021.
Stay mindful of these conversations without letting them lead you to do anything rash with your buying or selling ambitions.
Our Housing Market Forecast Suggests Being Open But Cautious
We’ve hit you with a lot of housing market forecast predictions for 2020. To summarize what we think you should do, we believe that sellers that are planning on getting out of their homes in the next five years should consider a 2020/2021 sell. Buyers that are looking to buy may want to hold unless they can find a great deal since prices may start to plummet within the next half-decade.
The decisions that you choose to make on your home buying journey are up to you. Just do your best to stay informed and make smart money moves.
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