2020 Seattle (Residential Real Estate) Market Forecast & 2019 Market Review

2020 Seattle (Residential Real Estate) Market Forecast & 2019 Market Review


I’m Sean Reynolds, the owner of Summit Properties
NW and Reynolds & Kline appraisal. And this is your 2019 real estate year in
review and predictions for 2020. Wow. So 2019 was quite a year for the Puget sound
real estate market. Buyers were struggling to find homes, prices
were up even higher, and that all too familiar subject, limited housing and inventory. So how will the 2020 housing market shake
out in the current economic climate? While more inventory come on? Will prices continue to rise and how fast? Should you buy, should you sell? Watch this video for a quick recap of 2019
and all my predictions for 2020. Real estate trend number one. Home prices are still rising, but slowly. Okay, let’s start with home prices. Overall, home prices grew slower in 2019 than
in 2018, and those are national numbers as well as local numbers. Our local real estate numbers were higher,
but not significantly higher. And this year seems to be no different. In fact, real estate gurus predict that home
prices will only rise by about 2.8% in 2020 so the prediction for 2020 is, you’ll likely
see home prices continue to creep up, but they probably won’t knock your socks off with
rapid growth like we’ve seen in previous years. Real estate trend number two. Mortgage interest rates are on the decline,
for now. Mortgage interest rates have been going down
in 2019, steadily dropping under 4% for typical types of loans. In 2020, economists think interest rates will
stay around 3.7% for 30 year mortgages and 3.2% for 15 year mortgages. But low rates are not a guarantee, because
things like tariffs and trade wars might gradually shift the economy, which could result in the
federal reserve slowly increasing interest rates to balance things out. Keep in mind, this is an election year, and
uncertainty over the trade wars are keeping investors heavy in the bond market. Mortgage rates loosely follow the yields of
the 10 year treasury bond. My prediction for 2020 is continued low rates
in the first half of the year, and maybe start to see some increases in the second half. Real estate trend number three. The majority of the home buyers will be millennials. Millennials took the lead as the largest group
of home buyers in 2019. A millennial is anyone born between 1980 and
1998. They are the buyer demographic who can’t wait
to post a pic of their new home on Instagram. And in 2020, this trend will continue. The interesting thing about millennials is
that they often forego the traditional starter homes and go right for the move up home. This is due to their postponing of major life
events such as getting married, having kids and buying their first home. Millennials will dominate the housing market
accounting for almost 50% of all mortgages by next spring, and this is according to industry
analysts. Just short of five million millennials will
turn 30 in 2020, which is when people buy their first home and then the oldest will
turn 39, generally when family dynamics kick in and people move to larger homes in the
suburbs. You will see the trend of more millennials
entering the marketplace in 2020, and they will continue to have greater influence on
our housing dynamics. Real estate trend number four. Inventory is really low, and could hit historic
lows in 2020. Inventory in the Greater Puget Sound was just
over 1.5 months of supply at the end of 2019. That is super, super low. Normal inventory levels are somewhere between
four to six months of supply on the market. And if you’re a buyer, don’t expect to see
a huge surge in inventory. Sellers are holding out, putting their homes
in the market with steadily rising prices, and often they can’t find their next home
to move to. It’s not on the market, so they are staying
put, and there are more buyers out there than there are homes for sale. So any new inventory is steadily being taken
off the market. Jobs being created and the Puget sound areas,
especially around the urban centers as employers gravitate towards our cutting edge technology
environment. And my prediction for housing supply is that
2020 will prove to be the most challenging year for buyers. Not because of what they can afford, rather
what they can’t find. Real estate trend number five. If 2020 is the year a recession occurs, housing
won’t be overly effected. There’s a lot of talk of our US recession
starting in 2020. Although that sentiment is becoming somewhat
muted after strong economic numbers in December. And if an economic slowdown does happen in
2020, I predict the housing market will weather the storm. Unlike past recessions, there’s now an extremely
low inventory of homes, and that’s why I think the price of entry level homes will once again
grow faster than incomes in 2020. So that’s a quick look at what we experienced
in 2019, and my predictions for 2020. If you don’t agree with my predictions and
think something else will happen, I’d love to hear what your predictions are in the comments
below. Thanks so much for watching this video, I
wish you all a happy 2020 and look forward to working with many of you in the new year. Catch you in the next video, bye for now. Don’t forget to subscribe to our channel,
and hit the notification bell so you’ll know when our next video is out.

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