Many speculations are revolving around regarding the real estate market of 2020. Is it going to flourish or 2020 will witness a bloom in the housing sector? What is waiting for the real estate companies, brokers like William Gaudreault (a real estate agent), dealers in the New Year? We are now about to welcome the New Year. Let’s have a look what is going to happen as per the reports and analysis of some esteemed organizations.
What Is Stored In 2020 Housing Market?
The housing sector is going to be challenging in 2020. On one side, the US economy has witnessed a disappointing employment rate that has a negative impact on the overall growth of the state while on the other hand the disposable income got a boost which is not a positive sign. This in turn, led to low interest rate and shortage of houses.
The experts think, the low interest rate will be good for the mortgages and the sellers will get a fair piece for the houses. This is a good indication for the housing sector in 2020. Again the lack of housing will also continue in the next year. This will partially contribute to the overall growth.
But cloud is there behind the sun. The high unemployment index will reduce the affordability especially of the youth, the first time home buyers. This will slow down the growth. The home price index reached highest ever 218.27 in September 2019. The high price will also stop the buyers.
The sellers who will demand high price may not get plenty of offers since the buyers will be priced out of the market. This will put more stress on the sellers. Those sellers who follow the traditional marketing strategy will have long listing times.
Have You Heard About Pent Down Demand?
Moreover, there is pent down demand. It influences the expensive items, for instance, like large appliances, vehicles, homes etc. Pent up demand results by low price expectations, credit crunch, and low confidence of the consumer. It is the output of low price financing policy.
Will It Going To Be A Repetition Of 2005 Real Estate Scenario?
In the last decade the housing sector went to a bust in 2007 from a boom in 2005. Some says, the US market will witness the repetition of it. But many oppose. There are many differences in the situation. House is an overvalued asset, of course but not to a large degree. The housing bubble in 2005 was the outcome of many major factors, like house-flipping, speculations, loan or mortgage without proper documents. These all had affected most of the borrowers very badly.
A Different Scenario Is Expected In 2020
Any huge crash will probably not be going to happen 2020 as the excessive risks are seen in very few cases. The renowned real estate broker, William Gaudreault agrees.
Rather the 2020 market will be a stable one. We are expecting a reasonable price for most of the housing properties.