REAL ESTATE WORLD HEADING INTO 2020
Whether you’re looking to buy or sell a home in the new year 2020, it helps to know what you’re up against! Homebuyers may continue to find themselves frustrated in some markets, as the relatively few properties coming on the market aren't meeting demand. The likelihood of continued low interest rates make it possible for more individuals to become homeowners for the first time, but fear of a "recession like atmosphere" to hit during a campaign year may make many consumers hesitant to purchase a house and risk financial security.
At the start of 2019, rising interest rates caused many homebuyers to pause their plans for a purchase, they were just not willing to take on a financial burden they couldn’t afford. As a way to ensure buyers remained active, a majority of mortgage lenders began lowering their interest rates, which have, typically, been below 4% since May for 30-year, fixed-rate mortgages, according to Freddie Mac. These rates are expected to remain low throughout 2020.
In cities and metro areas the population is growing fast due to new residents moving in. This area is where you’re likely to see home prices increase the most. The influx of new residents certainly drives up property values as demand increases over the long term, but that means the buyers on the market are more likely to be transplants than lifelong locals. “Any time we see a big increase in migration, prices go up and locals may feel it become unaffordable for them,” says Daryl Fairweather, chief economist for national real estate brokerage Redfin.
The newest generation in the housing narrative, Generation Z, a group often defined as made up of those born between 1996 and 2010, is largely not ready to purchase a home yet. But expect some 18- to 22 year-olds, the oldest Gen Zers, to be a small portion of the market in 2020. Ryan Gorman, president and CEO of Coldwell Banker NRT, says the Gen Z individuals who are looking to buy now are early adopters, and they’re more likely house hunting in small or midsize Midwestern or Southern cities where the cost of living is low. “That segment of the generation is able to purchase, and the inventory is there for them to purchase,” Gorman says. So look out Southern and Midwestern states, buyers of this generation will be coming in droves as 2020 goes into full swing!
Home prices are expected to continue to trend upward, and home sellers will most likely benefit from the number of buyers encouraged by low interest rates. However, don’t expect any home price explosions on a large scale. There aren’t expected to be too many sellers in 2020, experts say. National real estate brokerage Re/Max reports that in October 2019, the inventory for homes for sale was 9% lower than the same month in 2018 across over 54 metro areas. This low inventory trend, at least compared to the number of consumers looking to buy, is expected to continue through 2020. Many homeowners locked in low mortgage rates over the past decade, so many don’t feel the need to move. With the equity they've built in their homes they continue to have a low, fixed-rate mortgages with no need to refinance.
On another note, studies show that the baby boomer population appears to be focused on aging in place rather than downsizing or moving to different accommodations in their retirement. Combined with the low mortgage rates they already have on their homes, seniors aren't feeling too inclined to move.
According to Leading Edge Real Estate Group Team Gatlin Leader, Susan Gatlin, Lincoln County is in the midst of a market that has gone up in price per square foot and dollar amount of properties, but there are just less properties to sell. Susan's research has shown that the number of properties to sell in Lincoln County from October of 2019 to the early days of January 2020 has decreased. While that statistic seems to be leveling off, it is nowhere near the market of 2018 where July was the strongest month in recent history. Susan reports that the biggest challenge in our local real estate world is that we have more buyers coming into the area but diminished properties to show them. So what is Susan's outlook for 2020 as a whole? She states that she's confident that more builders will be entering the area; and if the new buildings come in in the $150-250k range it will begin to match the buyers in place and we'll see an upward trend in the market.
So there you have it, folks. It looks like across the board in the country, and even trickled down into Lincoln County, TN, there are a slew of buyers and only a handful of sellers. What does that mean on the whole? It means if you are looking for your little piece of heaven then you will need a top notch real estate agent to help you navigate this field to held find your dream home. Team Gatlin Agents are well versed and up to date on all the research they need to help accomplish any goal you may have. Let them work for and with you in 2020!
Leading Edge Real Estate Group 1423 Huntsville Highway Ste. A Fayetteville, TN 37334 Office (931) 433-4070 Susan Gatlin (256) 424-5378