The U.S. real estate market has been strong for over a decade. Though there have been some concerns about a property bubble, current real estate trends reveal that market fundamentals remain solid.
Low unemployment, an improving economy, and low-interest rates are great signals for both buyers and sellers. However, higher home prices and a lack of available homes for sale have kept some entry-level buyers out of the market. Housing affordability is also a significant concern as we enter 2020.
Economists pay close attention to the real estate market as a key indicator of the overall financial health of the United States. The actual real estate market’s fluidity makes it a place where trends are constantly changing. Developing trends usually require a few years to enter the mainstream and become the norm. As a result of this, clever agents and brokers keep their hands on the pulse of the industry so that they can adapt to those trends well before everybody else can beat them to the punch.
As 2019 is coming to a close and we are about to embark on a new decade, here are some of the top real estate trends to look out for in 2020.
Top Real Estate Trends 2020
1. Millennials will Enter the Home Buying Market
There are 74 million millennials ready to enter the home buying market and purchase their first home. As a generation, Millennials are purchasing their first home later in life compared to prior generations, but all signs point to 2020 being the lift-off point. Considering that the average group of homebuyers from the millennial generation is now earning a decent salary, many economists believe that millennials provide salvation for a slowing home market in 2020.
If you are interested in understanding more about millennial migration trends check out our blog on where millennials are moving.
2. Lower-Priced Homes will be in High Demand
While higher-priced home purchases have slowed, lower-priced homes have not and will not follow the same trend. With millions of millennials finally prepared to join the market and buy a starter house, this demand keeps the competition steep. Another contributing factor to a lack of modest homes is that older individuals are choosing to stay in their homes longer. If you have been having trouble selling the fixer-uppers or smaller homes in your area, look for this market to pick up in the new year.
3. Geographic Market Trends
Currently, Realtor.com lists these top 5 cities as the hottest in the housing market:
- Fort Wayne, IN
- Pueblo, CO
- Columbus, OH
- Rochester, NY
- Colorado Springs, CO
The hottest cities can change on a dime, but at least for now, this gives an indication of what 2020 will have in store.
4. Video Marketing will be Crucial
Fortunately, or unfortunately, buyers have come to expect to see videos of the homes they are looking to purchase. While this can be added stress to the listing agent, the benefits of increased exposure to listings is priceless.
As more millennials are becoming parents and the cost of living in urban areas continues to rise, we are seeing a growing trend of what is being called “hipsturbia.” This trend occurs when younger generations are pushing out of the cities and into the suburbs. This is leading to the suburbs becoming more diverse, walkable and full of retail, restaurants and recreation. This trend will lead to more home buyers in these locations and to developers transitioning downtown areas into more desirable streets.
6. Growth in Second-Tier Cities
With major housing market prices only going up, current home buyers are going to turn to second-tier cities for their purchase. This trend will be solidified by the fact that many major corporations are also moving their headquarters to the same cities in order to provide a more affordable cost of living rates for their employees.
Some of the most popular second-tier cities include:
- Las Vegas
7. Tech and AI will Shape the Industry
The impact technology has on the real estate industry will grow more and more visible as we enter 2020. Property tech is a game-changer for the agents and brokers, and it also impacts the level of services that home buyers and sellers will come to expect. With technology comes streamlined processes and increased user experience, but it also comes with its challenges.
8. Increased Need for Senior Housing
The number of Americans over 80 will double, from 6 million to 12 million, over the next two decades. This will mean a massive flood of retirees and seniors searching for a variety of housing options. This could include active lifestyle living communities to even upscale urban apartments.
If you are interested in understanding more about retiree relocation trends checkout out our blog on where people are retiring.
9. High Relocation Numbers Increase Benefit of Referrals
If you combine the mobile nature of millennials and their emergence into the housing market with the increased number of retirees and seniors looking for new housing options, the number of clients you have that will be relocating will increase in 2020. Like any trend, the benefit of forecasting is being able to capitalize on the trend before it even takes off. But how can real estate agents and brokers benefit from higher relocation rates? City-to-city referrals.
RealProcity is the leading platform for nationwide referrals and can help increase your monthly commissions as well as provide generational sales. Don’t enter 2020 without a referral plan in your back pocket.
Preparing for 2020
The real estate industry is full of confidence going into 2020 even though slower growth rates are anticipated. With mortgage rates projected to remain lower than 5%, the demand for housing is expected to continue to increase.
Millennials entering the market will drive the demand for starter homes. All while prices will begin to cool down for luxury homes. With newer technologies and a referral network at your fingertips, you can be on your way to making 2020 your best year yet.