This time of year, there are a ton of “housing market prediction” pieces flooding the airwaves. Some are crazy, many are measured, and when you put them all together, you get a fairly clear picture of where experts think the industry is headed in 2020.
Below, we’ve gathered the top 10 predictions from a few different sources (Realtor.com, WaPo, and Forbes, to be exact). I’ll add my two cents at the bottom, but here are some possibilities for housing in 2020:
1. Moderate Growth in the Housing Market
New home sales are expected to rise, but existing home sales will remain held down by a lack of supply. Overall, this equals an expectation of moderate growth.
2. Continued Low Rates
The National Association of Realtors (NAR) expects the 30-year fixed-mortgage rate will remain below 4 percent in the coming year, moving to 3.8 percent by the end of 2020.
3. Hottest Home Appreciation Markets? Not in CA
The NAR expects 10 markets to have home price appreciation that outpaces the rest of the country over the next 3-5 years. None are in California:
- Ogden, UT
- Las Vegas, NV
- Fort Collins, CO
- Colorado Springs, CO
- Dallas/Fort Worth, TX
- Columbus, OH
- Raleigh/Durham/Chapel Hill, NC
- Charlotte, NC
- Charleston, SC
- Tampa/St. Petersburg, FL
4. Home Prices Will Flatten
Don’t expect to see a surge in home prices – experts at Realtor.com think they will only increase 0.8 percent nationally. They expect prices to decline in some major cities, including San Francisco.
5. Again, Top Markets Shut Out CA
Realtor.com agrees with the NAR in that California won’t have any of the top markets in 2020. Their list:
- Boise, ID
- McAllen, TX
- Tucson, AZ
- Chattanooga, TN
- Columbia, SC
- Rochester, NY
- Colorado Springs, CO
- Winston-Salem, NC
- Charleston, SC
- Memphis, TN
6. Competition Will Increase
Redfin thinks that 1 out of 4 offers will face a bidding war. This increased competition might push price growth up to 6 percent higher in the first half of the year, before it evens out to a more moderate 3 percent.
7. Revenue Will Fall
The Morgage Bankers Association expects lenders to chase fewer loans. They say purchase applications will be up slightly, while refinances will be lower.
8. Millennials Will Shape the Market
Realtor.com data shows that Millennials made up a whopping 46 percent of all mortgage originations in September 2019 (meanwhile, that share of Baby Boomer and Gen X mortgage activity declined). And they’re looking to move into smaller, suburban towns on the outskirts of major metros. Forbes says they want places with live-work-play neighborhoods with the safety and affordability of suburbs AND the transit, walkability, and 24-hour amenities of the big city.
9. The Industry Will Continue to Digitize
Manual, paper-laden processes are old news. Tech-savvy Millennials are entering the market at a fast pace, so the real estate industry is adjusting to meet their demands. Get ready for e-signing everything!
10. California’s Market is Changing
According to Realtor.com, three of the top four metro areas seeing the largest decline in inventory are in Northern California (San Jose, Sacramento, and San Francisco-Oakland).
From what I am seeing and in conversation with other agents the 680/24 corridor will have a robust spring. I had one of the busiest Decembers ever and expect the will continue into the first quarter. The challenge will be finding buyers homes, as I think most will have multiple offers.
Next January, we will have to revisit these prognostications and see which ones were on the money$$$.
