The year of 2019 was quite a year for the U.S. housing market. Depending on where you live either in a rural, semi-rural or urban market……. Basically the Median home prices went all the way up to $316,000—a record high for home buyers in alot of markets. Will 2020 bring more of the same results or will we flatten out and stall as we have been doing on this roller coaster real estate market for a while? How will the housing market remain in the current economic climate?
Whether you’re selling, buying or staying put, here are the 2020 real estate trends you need to know! Some of these treads have not changed and will remain so in the real estate market.
Home Prices Are Still Rising Slowly:
We will start with home prices. Overall, home prices grew slower in 2019 (3.3%) than in 2018 (5%). And this year seems like it will be no different. In fact, real estate gurus predict that home prices will only rise by 2.8% in 2020.2 You’ll likely see home prices continue to creep up, but they probably won’t knock your socks off with rapid growth like we’ve seen in previous years, prior to 2007-2008.
Higher Prices Mean for Sellers: This is a New Trend since 2008!
Sellers who were underwater when the real estate market collapse may be able to break even or even come out ahead! Keep in mind that a lot of buyers are being priced out of the market at the moment, which could lead to fewer offers for a property. What should the seller do about this? Be aware of your competition. With less offers to go around, you will want your home to really stand out from similar ones in your area. Prepare your home for potential home buyers and work with a real estate agent to help you list your home at the right price. Visit my web site voncannonrealestate.com as I have written many articles over the years about this.
A seller may have to wait for the right offer. Some buyers may try to gut punch you with a low number. Do not be afraid to counter and hold your ground! If you aren’t in a hurry to move, wait for an offer that gives you the most profit. Remember, the less desperate person always has the upper hand when negotiating! The important issue here is to price it right when you 1st list it. Sellers who are too high on the original list price lose ground and the property becomes stale. I cannot tell you enough that you have to get a qualified agent, not a friend, family member, Sellers do your research on your listing agent!
Higher Prices Mean for Buyers:
If you’re going to buy a home in this market, you absolutely must find out how much house you can really afford. Crunch the numbers yourself with our free mortgage calculator and figure out a monthly payment your budget can handle.
Talk to several lenders ask about programs and rates, see which one you are most comfortable with. Do not let anyone pull your credit till you commit to a lender you like and trust.
If the buyer chose a 30 year loan do not panic. Making a payment on principal once or twice a year can cut a 30 year mortgage to a 15 year mortgage or less. Different lending programs offer different earnest money deposits.
Words of Advice for Buyers:
Sacrifice some wants: If you can’t afford to buy the house you want, be willing to give up some “nice-to-haves” for your “must-haves.” Find the least expensive home in the best neighborhood you can afford and you can upgrade as your income and savings increase over time. This has been a truth for real estate forever!
Expand your search:What if the location where you’re planning to buy is what’s streching your budget? You might be surprised at the gem you can find in a less popular neighborhood. Working with a real estate agent who really knows the area is the best way to find a home that fits your budget and lifestyle. You may want to go further out to get what you want for less money. Just keep this is mind as they have always been true in real estate.
Buying or Selling a home can be stressful. Work with an agent who will help you think through all the important parts, this will make the transaction more enjoyable.
Mortgage Interest Rates Are Currently on the Decline…They are Still Historically Low:
Mortgage interest rates have been going down in 2019—steadily dropping below 4% for common types of loans. 2020, economists think interest rates will stay around 3.7% for a 30-year mortgage and 3.2% for a 15-year mortgage.
Lower Rates Mean for Sellers:
If interest rates stay low, buyers will be more motivated to buy your home sooner than later. But if interest rates do start to increase later in the year, just plan for your house to be on the market a little longer. A mortgage is a big commitment, and adding higher interest rates will increase time on the market.
An experienced real estate agent can help you set expectations for how much you can make, and how long you’ll have to wait for the right offer. Do not go with an agent who tells you a higher price and if you look at their listings they tend to list high and start dropping the price. The seller should get 95% to 89% of the asking price.
Lower Rates Mean for Buyers:
Having lower interest rates mean that the buyer can get more of what they would like to have wish list as oppose to the list of I must have. Home ownership means that you will have your own space and the tax credits that are associated with ownership. It will also increase your net worth.
NO matter if you are selling or buying a home in 2020, some of the tried and true real estate trends do not change. Happy Home Hunting!