At the end of the year all eyes are on the new year. Too bad we don’t have a crystal ball to predict the real estate market of the future. We only have the current situation and historical trends to guide us.
Real estate market trends are driven by several factors: inventories, home prices, interest rates, days on the market, regional differences, population shifts, and global stability to name a few. No wonder it is virtually impossible to predict the future.
Let’s look at a few the driving forces which have influenced real estate in the past:
INVENTORIES: Housing inventories have fallen for the past 43 straight months, going back to 2016 according to the noted housing expert, Eman Hamed Mashvisor. This shortage has driven up prices and increased competition, especially in the entry-level home market.
HOME PRICES: The rise of home prices has outpaced income by 31% since 2013. 2019 saw some moderation in pricing, but still leaves the appreciation rate for 2020 at 3.7%.
MORTGAGE INTEREST RATES: Rates continue to drop for the conventional lending community. Those who fail to qualify for these loans can look for relief from alternative financing Hard Money lenders, such as Sun Pacific Mortgage, to help get them into a home or invest in rental properties.
MILLENNIALS: Don’t discount the impact of the immense millennial market in 2020. Their demand for entry-and-mid-level homes in urban areas could help keep us in a seller’s market given the lack of inventories.
What have we learned from history and from this examination of the present market? Real estate is a complex entity. The only prediction that is guaranteed for 2020 is the world of real estate will remain interesting. Get ready to enjoy the ride!