Today I’m sharing the latest predictions for 2020 that both buyers and sellers should hear.
Let’s look at three predictions by housing experts to see whether 2020 will be a positive year for the real estate market.
Housing demand will remain strong in 2020, according to research conducted by the National Association of Realtors. This is largely due to millenials, the largest demographic in the country right now; this year, the average age of a millenial will be 30—prime age for buying a first home. Experts estimate that millennials alone will account for roughly 4.8 million potential homebuyers throughout the year.
Despite the explosion in buyer demand, experts anticipate that the rate of home price growth will flatten. Prices will still increase, but at a slower clip—around 0.8%, compared to last year’s 3.8% (in the Portland metro area, we had a 2.5% increase in housing prices year over year).
This concept may seem counterintuitive. How can price growth drop if demand is increasing? Well, the answer comes down to a boost in new construction. Experts estimate that the construction of new homes will finally pick up in 2020, relieving a lot of the low inventory woes and flattening price growth.
That prediction is supported by home builder sentiments: Right now, surveys indicate that home builder confidence is the highest it’s been in nearly 20 years.
What does this mean for you? If you’re selling, it makes sense to do it now. Supply is tight right now, and with price growth expected to lag behind inflation in 2020, it makes sense to seize the moment. Sellers, be sure to check out the home price calculator on my website.
For buyers, especially those seeking a starter home, it may be best to wait until new construction creates new supply. However, those in the market for mid- to upper-level homes, be aware that several beautiful houses have come on the market recently.
Keep in mind that none of my predictions are perfect. They don’t take into account the coming election, trade negotiations, or any other possible shocks to the economy. So if you’re thinking of selling or buying, give me a call or send an email. We can make your 2020 real estate move a smart one.