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Lower than expected interest rates kept real estate strong in 2019 and many experts predict 2020 will keep rolling in the same direction. According to a recent article in Forbes, Odeta Kushi, deputy chief economist at First American, shared that mortgage rates will remain low next year, between 3.7 and 3.9%, fueling a healthy real estate market.
PRICES TO KEEP RISING
Tight inventory and increased demand will keep pushing prices higher. In fact, with mortgage rates either staying the same or actually dropping, competition will increase for buyers which may result in bidding wars. Redfin predicts one in four homes will result in a bidding war which is great news for home sellers who may have been holding out when most homes prices dropped slightly on the Central Coast over the past year. The Forbes article shared data from CoreLogic, stating home prices should tick up by 5.6% by next September which is more than 3.5% from this year.
ECONOMIC GROWTH, NOT A RECESSION
Although many economists have predicted a mild recession in 2020, a housingwire.- com report states, “Current conditions point to a recipe for continued economic growth, not a recession. Growth itself may be slower than the strong pace we’ve seen at times throughout the recovery, but growth will still occur for at least the next year.” Reasons cited for the economic growth are a healthy consumer confidence and job growth.
HOME SIZES WILL SHRINK, BUT AMENITIES ARE KING
Inventory will continue to be tight as Millennials and Generation Z enter the market, but Baby Boomers are not budging from their long-time homes. Zillow predicts that new home sizes will shrink for the fourth time of five years due to younger buyers having less money and can’t afford to purchase larger homes. To make up for square footage, many new homes are offering upgraded amenities to attract buyers.
Whether you are looking to buy or sell in the new year, experts agree you should enter the real estate market early in 2020 to take full advantage of the growing market. As the #1 broker on the Central Coast, C21 Hometown Realty’s Agents have the most homes listed and the most homes sold! Visit one of the ten local offices throughout the Central Coast or click on c21home.com.
About CENTURY 21 Hometown Realty – Hometown Realty is the leading real estate firm on the Central Coast of California with offices spanning Santa Barbara County and San Luis Obispo county offering expert agents and convenient locations.