Just ten years ago, many homeowners were desperately trying to hang on to their homes. Trying to sell a home was considered a nightmare. Buyers were having a struggle to find a financial institution that would lend them the money to purchase or refinance a home. Thank heavens that is all behind us!
The fundamental landscape of American real estate has changed in many ways. This phenomenon is especially evident in California where more people are moving out of cities, and Millennials are replacing the Baby Boomers and Gen Xers as the dominant buying forces. One constant has been the lack of homes for sale making it difficult for buyers since 2015. Even if home construction increases slightly, it still won’t be enough.
Buyers are done with “overpaying”. This has happened already in major cities like San Francisco where housing prices have skyrocketed and driven many to more affordable locations, even if it means increasing commute times.
By the middle of 2020 the oldest Millennials will be turning 39, and it is predicted that they will account for more than 50% of the mortgages taken out in the country. Millennials are going to be a big factor in the homebuying industry because it is at this age, that they begin to think of having a family and are more motivated to become first time home buyers.
Sellers of entry-level homes should be very happy in 2020, because these homes will continue to be the most in-demand properties. Higher end sellers should be mindful of the competition and price their home competitively if they don’t want their properties to sit on the market for extended periods.
While we are all enjoying a healthier real estate market, compared to the one we suffered through a decade ago, we still have our issues: lack of inventory, construction restrictions, and over-priced homes. But, as with all good (and bad) things, it too will pass.
The real estate market has always been cyclical and the 2020 prediction is that real estate values will continue to increase, overall making it a good time to sell or buy!