Monday, December 30, 2019

2020 Housing Forecast: Sunny Days for New Construction


"Home sellers will remain on the sidelines, but millenials are on the move."


I love this infographic. They say a picture says a thousand words and this one represents both a business plan and a marketing strategy for 2020.

Mortgage Rates by end of 2020 increase to 3.88%
(still crazy low)

Average Median Home Price up by 0.8% 
(median home prices predicted to increase 3.6% according to NAR's Forecast)

Homeownership Rate 64.6% 
(troubling: essentially no growth 2014-2019 resulting in less home equity wealth-building)
Source: NAR Real Estate Summit Forecast

Single Family Housing Starts up 6%
(new construction continues to position itself as a viable inventory shortage solution)

Existing Home Sales Down 1.8%
(existing homeowners are staying in place, plus purchases shifting to new construction)

Take Aways for 2020

  • Low mortgage interest rates, minimal down-payment requirements, home equity wealth-building opportunity and the IRS mortgage interest tax deduction offer a winning scenario for Buyers in 2020.
  • There will be more new-home inventory for Buyers to choose from, replacing the void created by the lack of existing-home inventory. New construction is the housing shortage solution for Buyers.
  • For Sellers, the heyday of listing as-is and selling day-one with multiple offers is drawing to a close for this market cycle. New construction will continue to be the primary competition for existing-home sales into the foreseeable future. See Related Blog Post: Selling? Think Like a Buyer

Kim Novak is a CSP: Certified New Home Sales Professional and a CRS: Certified Residential Specialist. She can be reached at (801) 726-1443 or by email to kim@novakadvantage.com

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