Real Estate Trends 2019-2020
2019 has been yet another great year for the Real Estate market. The rise in home prices has started to slow, but demand is steady. Mortgage rates have dipped to historic lows, and there has been a recent increase in new housing construction. These are all indicators of a strong, healthy real estate market, and these trends are expected to continue well into 2020. This is great news for both buyers who are looking to become new homeowners and sellers hoping to make a move.
Home Prices Are Rising, Slowly
The National Association of Realtors is expecting home price increases to slow slightly in 2019 but expect a "soft landing." The average home sales price is expected to increase roughly three percent over the course of 2019, and they expect home sales to increase by one percent over last year's growth. Slower steady growth is an excellent sign of a healthy, stable market.
The total number of homes sold next year is still expected to rise, even if it's at a slightly slower pace than recent history. That's great news for sellers but, higher prices means some buyers will be priced out of the market, which could ultimately lead to fewer offers for sellers.
Slower growth in home sale prices isn't always a bad thing. Slower appreciation and lower prices it can enable more buyers to enter the market creating more demand. What matters most is the fundamental strength of the economy; low unemployment numbers, healthy consumer spending, and responsible lending practices. The Federal Reserve wants the economy to grow at a slow, steady pace to prevent another market crash down the road. This is what will keep home prices stable and steadily increasing as supply and demand fluctuate in various markets.
Markets Remain Hot in the South
According to the S&P CoreLogic Case-Shiller Home Price Indices- the leading measures of U.S. residential real estate prices- Phoenix, Arizona, led the U.S. with an annual price increase of 6.3% in 2019. Price gains in the Southeast remained strong led by Charlotte, North Carolina, Tampa, Florida, and Atlanta, Georgia, which saw prices rise 4.5%, 4.3%, and 4%, respectively. Some southern coastal markets like Cocoa Beach, Florida, show no signs of slowing down anytime soon.
Slightly Longer to Sell
With fewer buyers in the market, there will also be fewer offers, so you will want your home to stand out from competing homes for sale in your area. The best way to present your home is to put extra effort into online marketing, curb appeal, and staging to present your home in the best possible light for potential home buyers. Most important of all, work with a professional Realtor to help you list your home at the perfect price.
Higher prices for buyers means they may need to expand their search area or be willing to give up some extra "wants" to get their "must-haves." It is also a good idea to consider looking at the least expensive home in a good neighborhood or a fixer-upper that may need a little work.
For home sellers, today's real estate trends mean fewer offers. Still, good listings in hot markets will have no problem selling in a reasonable amount of time. Overall, market demand is still strong, and prices will continue to rise, albeit at a slower pace. The bidding wars and overnight price gains of the past few years are fading, but sellers in hot markets can still expect strong demand driven by a low supply across the country. You can see if your market is "slowing" by looking at the average Days On Market—DOM or the number of days a home is actively listed for sale.
Find a professional real estate agent who is an expert in your current market. They will help you set expectations for how much you can sell for, and how long it may take to receive the right offer.
Rates are Still Historically Low
Economists at Freddie Mac predict the fourth quarter of 2019 will average a 3.7% interest rate or lower on a 30-year, fixed-rate loan. According to Fannie Mae, the 2019 average has been about 4% apr overall, and they expect the year to average out at about 3.9%.
For home sellers, higher mortgage interest rates mean properties will be on the market slightly longer and to possibly receive fewer offers. For home buyers, higher mortgage interest rates mean they will have less purchasing power, and they will not be able to afford as much house. Even though mortgage interest rates are starting to climb, they're still historically low.
Millennials Will Be Buying
In 2019, millennials will lead the way in new mortgage originations, accounting for at least 45% of the total real estate market and since 2017, millennials have accounted for the largest share of new mortgage originations in the country. Realtor.com expects millennial buyers to be the largest segment of home buyers again in 2020, accounting for more than 45% of all new mortgages. Data from the National Association of Realtors (NAR) shows that Millennials made up more than 37% of all new homebuyers last year and more than 20% of all sellers.
Millennials are used to living in the instant gratification age of high-tech conveniences of Netflix, GrubHub, and Amazon Prime. They expect convenient online home shopping as well. millennials are very internet savvy and do their research online before house shopping, so you need to make the best possible online impression with great photos, a well-written property description, virtual tours, and an accurate listing price.
Millennials are looking for energy-efficient smart homes and homes in up and coming trendy cities like Nashville, Tennessee, or Austin, Texas, or Cocoa Beach, Fl that offer big city life at a more affordable cost of living. Smaller cities are also growing and creating more affordable opportunities for buyers. Many of the larger metropolitan cities have become too expensive, and that has led to growth in smaller fast-growing cities and in the suburbs outside of large cities — a re-emergence of the suburbs.
Property Tech And AI in the Real Estate Industry
The impact of technology on the real estate industry has become much more prominent. Property technology has changed how agents, brokerages, and buyers and sellers work. From real estate service apps and websites to AI assistants and digital brokerages, the real estate industry is being disrupted. And that's a good thing for the market as a whole.
Today's Real Estate Trends Mean homebuyers
...should not expect major price reductions as home prices are still gradually increasing in many markets, but they will have a greater supply of homes to choose from. This is good news for patient buyers looking for a good value or the perfect home.
Many first-time homebuyers may continue to struggle with affordability. While more first-time homebuyers are entering the market, rising home prices will make it more challenging to get everything on their wish list so right now is still a perfect time for potential first-time homebuyers to enter the market. There are no signs of an impending market shift that would either force them to feel pressured to buy quickly or cause them to hesitate in buying a home. So, yes, 2019 is still an excellent time to search for that new home or to put your current home on the market.
Whether you are planning to list your home or you are looking to buy your dream home, the current trends are favorable. Partnering with a professional Realtor in your area and make your dream a reality.