Now that we are in a new year and decade, let’s see what housing and real estate experts are predicting for the year 2020.
Property data firm CoreLogic predicts that housing prices will continue to rise, maybe as much as 5.6% by late summer or early fall, which is a jump from 3.5% from last year.
The chief economist for the real estate brokerage Redfin, Daryl Fairweather says that housing inventory is tight and that will drive competition and pricing for existing homes, especially for lower- to midrange-priced houses.
Data from Redfin shows that a limited amount of houses are available for sale. Homeowners are staying in their homes longer than in the past. The average number of years people stay in their homes is 13 years as opposed to eight years in 2010. In some cities, the average stay is up to 23 years.
According to the National Association of Home Builders, housing starts and building permits are increasing and builder confidence is at a 20-month high. Increased construction can help alleviate the shortage of homes for sale. However, most construction is on higher-priced and luxury homes, so the housing market for the lower end will remain tight.
Millennials make up over 46% of mortgage originations, up from 43% last year, according to data from Realtor.com. The challenge for many of these first-time buyers is low inventory and increased prices. The millennial generation is looking more for community, and experts predict they will move to the suburbs or outskirts of metropolitan areas. Many of the people in this generation work from home and don’t need to live in the city where their job is, so living on the outskirts is more affordable for them, and they can safely raise their children.
The real estate and mortgage business will continue to digitize. As more and more of the younger generation enters the housing market, they want to use technology to help in buying a home. While most companies already use e-signing and e-notary technology, more companies will use advanced customer relationship management (CRM) software to stay in touch with their team and clients.
It will certainly be interesting to watch the housing, real estate, and building trends as we move into a new decade.
Sources: Forbes, MarketWatch, Redfin
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