Inman just released its Essential Guide to Real Estate in 2020, 2025, 2030 and Beyond. Let’s take a look at some of Inman’s forecasts for the national real estate market by its five-year incremental markers.
Inman came to these forecasts by talking with a handful of industry experts. Inman’s bottom line conclusions? The decade of 2020 will be one of massive change within the housing industry.
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Beyond saying that 2020 will look like 2019 on steroids with iBuyer expansion and smaller homes, Inman believes the housing market will remain strong in 2020.
Skylar Olsen, Zillow’s director of economic research, cautioned, “Don’t make a mistake that this is a buyer-friendly environment. Consumers will continue to absorb available inventory and the market will remain competitive in much of the country.”
George Ratiu, the chief economist with realtor.com, believes that the 2020 housing market will be defined by “robust” buyer demand.
Mark Fleming, the chief economist for insurance and financial services with First American, told Inman, “Low rates are increasing (and will continue to increase) buying power significantly.
Warburg Realty’s CEO Frederick Peters believes that recession fears for 2020 are “unfounded” and Redfin predicts that bidding wars will return due to supply shortages and increasing home prices.
Homeowner Demographics Will Evolve in 2020
Zillow sees Millennials, now hitting their prime home buying age, driving the market towards smaller and more affordable homes. Redfin believes that Hispanic Americans will gain more home equity than Caucasian Americans for the first time in market history. Right now, home values in Hispanic neighborhoods are growing faster than home values in Caucasian neighborhoods and those home equity gains will benefit Hispanic families for generations to come.
Smaller Cities to Boom
The National Association of REALTORS® (NAR) predicts that coming-of-age or fly-over states and cities will see continued increasing demand. NAR identified cities within the states of Utah, Nevada, Ohio, Florida and the Carolinas as cities to watch.
What do or will these cities and states have in common in terms of draw? Relatively lower housing costs, strong economies, and the desire and demand for smaller, more affordable residences.
Climate Change To Become More Important
Natural disasters, increased flooding and more wildfires are expected to worsen in 2020. Paying for protection and damage from these occurrences is becoming more and more expensive as flood and fire insurance becomes more expensive. The National Flood Insurance Program is riddled with problems and is billions of dollars in debt.
According to Larry Larson, an engineer, policy advisor and founding member of the Association of State Floodplain Managers, believes that the issue of climate change is “slowly creeping into the consciousness of buyers and sellers.
Redfin believes, “homebuyers and sellers will take the consequences of climate change into account when deciding to buy” in 2020.