One of the most-asked questions for real estate agents is, “How’s the market?”
While it’s most important to know what’s happening in your area, it’s also a good idea to have a general overview. In the most recent Secrets of Top Selling Agents webinar, Steve Harney shares what experts are saying about this year’s real estate market in “2020 Market Predictions for Real Estate.”
After being in the industry for over 25 years, Harney is a residential real estate expert who specializes in market trends. He started as an agent and then developed his own 500-agent real estate firm.
Currently, Harney works with producers to help them achieve success. He is often quoted in major news sources and is recognized as one of the most accurate market trends predictors today.
In his Secrets webinar, Harney shares information about home price appreciation, interest rates and inventory and demand. Find out everything you need to know so you can talk to your clients as an expert.
What does the market look like?
Harney opens the webinar by stating that the housing market is a solid foundation for the U.S. economy going into 2020. In addition to this, home sales are projected to increase substantially in the coming year. This can be seen in the recent report from Time which showed an increase in buyer traffic, increasing by 12.6 percent nationwide. If you’re in the West, you probably saw a good year, with activity jumping 23.1 percent.
When thinking about when to make your next push in the industry, Harney advises not to wait until spring when most of the competition will also be out. Instead, he recommends starting now, since buyers are already flooding the market.
What is influencing these changes?
According to Freddie Mac, mortgage rates should remain low throughout 2020 and 2021, averaging around 3.8 percent. Fannie Mae, the Mortgage Bankers Association and the National Association of REALTORS® all also believe rates will remain under 4 percent through 2020. This means the market won’t be facing any resistance like what was seen at the end of 2018 when rates increased. Harney refers to this as a “perfect buying environment.”
Because there will be a greater influx of buyers and higher demand for homes, CoreLogic predicts that home prices will rise at least 5 percent over the year. Similarly, home value is expected to continue to appreciate. This is due to an inventory shortage and a high demand from buyers. In fact, in 2019, housing inventory dropped overall by 12 percent, while homes available for less than $200,000 dropped by 18 percent. This poses a challenge, especially since millennials and Generation X buyers are flooding the market, looking for low-cost homes. Harney says the best way to avoid issues with this is by listing properties as soon as they become available, especially if they’re in the lower price range.
Will there be a recession?
A recession is defined as a temporary economic decline during which trade and industrial activity decrease. While a number of experts expect a recession during 2020, it’s important to keep in mind that a recession does not mean a housing crisis. In fact, a housing slowdown is one of the bottom five possible triggers of a recession.
During the webinar, a listener asked whether home sales would be affected by the 2020 election. Harney explained that, yes, there may be a slight decrease in home sales during that time. However, it’s not due to a lack of buyers. Instead, it’s because people are distracted by the election and put off buying. As a result of this, generally, home sales the following year are expected to significantly increase.
To learn more of Harney’s tips and listen to the full recording of the webinar, join the Secrets of Top Selling Agents Facebook Group here. For more free real estate education, including best practices, visit the Secrets of Top Selling Agents website.