10 Housing Trends for 2020

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.

Image result for housing market

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
Image result for colorado springs
Downtown Colorado Springs

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).

Image result for housing market

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$$$.

Let’s talk about Millennials and Real Estate

My sons are Millennials. My Walnut Creek Lifestyle freelance writer is a Millennial. More and more of my clients and colleagues are Millennials, as that generation continues to age into home-buyers.

So, realtors like myself are starting to notice more trends with the market geared toward that age group. It’s a different real estate market for Millennials than it was for their parents – nowadays, they are graduating with huge student loan debts, having trouble finding lucrative work out of college, and then struggling to pay sky-high rents and mortgages once they do get jobs.

That said, Millennials are driving the real estate market right now, which has made the following observations more obvious.

From San Francisco realtor John Solaegui:

  • There is a low inventory of single-family homes in San Francisco
  • Millennial buyers don’t care about parking spaces (though this might be more prevalent in San Francisco – it’s contradicted by the graphic above!) with the rise of ridesharing apps – they’d prefer having decks or gardens for outdoor entertaining
  • Areas like Noe Valley, Glen Park, Bernal Heights and The Sunset in San Francisco are extremely popular with Millennial buyers right now

From the California Association of Realtors’ REALTOR Magazine:

  • Millennials are cashing in on equity at a historic rate, thanks to rising home prices
  • One-third of Millennials say they are considering applying for a HELOC (home equity line of credit) in the next 18 months – much more than Gen-X or Baby Boomers
  • HELOC’s are popular with Millennials because they can consolidate debt and afford home remodels with them

I think this is an interesting trend in our market. Home prices are high, but so are the debts and loans owed by Millennials, so we’re seeing more and more interest in new ways around that issue. And even more interestingly, Millennials are changing the way we market homes – who cares about parking when you don’t have a car, right?

How bathroom remodels are trending

Of all the things to remodel in a house, bathrooms and kitchens are probably the two most popular rooms.

bathroom-remodel-2

Houzz.com wrote a cool article about how homeowners are “craving stylish, beautiful spaces, with luxurious finishes and big showers.”Their study surveyed more than 2,100 Houzz users in the U.S. who own homes and are currently renovating their bathrooms, are recently done with a renovation, or are planning on one in the near future.

Check out some of the graphs that reveal the current trends for bathroom remodels:

How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend
How People Upgrade Their Main Bathrooms, and How Much They Spend