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15 Sep

Trends Transforming The Real Estate Industry in 2020

Economists pay close attention to the real estate market as a major indicator of economic news. While real estate growth in late 2019 has slowed down some, it is still a healthy market that is prospering – we see real estate signage all over the neighborhoods. When navigating the real estate market, certain trends and statistics are worth mentioning.

Real Estate Trends

1. Millennials represent a large potential pool of first-time homebuyers ready to enter the 2020 market.

74 million millennials comprise a huge demographic of consumers ripe for buying their first home surpassing the impressive number of baby boomers who burst onto the home buying scene in the 1970s and 1980s. Forbes reports that the average household income of this group of potential homebuyers is $88,200. Considering that the average group of homebuyers from this generation is now of age earning a decent salary, many economists believe that millennials offer salvation for a slowing home market in 2020.

2. Conventional loan requirements have gotten less stringent making it easier to buy a home today than in recent years following the Great Recession of 2008.

Underwriting guidelines have loosened a lot making it easier to buy a home today. The way conventional lenders have encouraged home buying is by lowering the down payment required along with the credit scores to qualify. Lenders are also allowing for higher debt levels. Many borrowers who were turned down in the past can now obtain a mortgage through conventional lenders.

Given the upswing of rental prices, first-time homebuyers in particular benefit from lower down payment requirements and more liberal debt ratios. While getting a mortgage loan is not as easy as it may have been prior to the Great Recession that started in 2008 or so, the mortgage landscape is much more welcoming today than four or five years ago.

3. Foreign buyer investment is down due to tax law changes.

Since the new tax laws came into effect in 2018, many foreign buyers have stopped purchasing homes in luxury marketplaces such as New York and California. A majority of these buyers were from Europe, China, and Latin America.

Politics do have a significant impact on the real estate investment market in particular. Another reason for the foreign investment slowdown can be attributed to China’s earnings and income figures cooling down. Tariff policy and the political mood of investors play a role in foreign demand.

4. Lower-priced homes are in high demand often receiving multiple offers.

While higher-priced home sales have slowed, lower-priced homes have not. With millions of millennials finally ready to enter the market and buy a starter home, this demand keeps the competition steep. Another contributing factor to a shortage of modest homes is that older people are deciding to stay in their homes longer. The New York Times reports a decrease in housing inventory with the number of affordable homes falling by eight percent.

5. Mortgage rates are expected to remain lower than five percent for the near future.

Low and stable mortgage rates stimulate the real estate industry. While it is impossible to know for sure how long this trend will continue, there is little evidence that the rates will spike, especially since we’re approaching a major election in 2020.

HBI reports that both the Mortgage Bankers Association and Freddie Mac economists expect the 30-year mortgage to average between 4.3 and 4.4 percent for the remainder of 2019. This is good news for the real estate industry that is extremely sensitive to mortgage rates. There is nothing that discourages homebuyers’ enthusiasm like rising mortgage rates.

6. Second-tier cities are experiencing significant growth as homebuyers search for more affordable buying options.

Forbes reports that the trend of looking to secondary options instead of spending so much in major housing markets is expected to continue through 2020. Many major corporations have driven this trend by relocating corporate offices to affordable locales. An example of this type of recent move is Toyota moving out of California to establish a Dallas office.

7. reports that the hottest housing city markets are in Lakeland, Grand Rapids, Miami, Boston, Phoenix, El Paso, Chattanooga, Boise City, and Bridgeport.

The cities that are hot in real estate in 2020 can change status quickly as market conditions shift. A seller’s market can become a buyer’s market almost overnight.

8. The competitive housing landscape has fueled amenity-rich apartments as a way to beat the competition.

Today’s finest multifamily developments boast movie theaters, communal gardens, laundry service, and even coworking space in many cases.

9. Home staging has become big business.

Decluttering is key for getting the best price for your home when it is time to sell. There is proof that sellers get substantially more if they stage their home.

10. Video marketing is here to stay.

Buyers expect to see videos of the homes they want to buy. Thus, video marketing  and virtual tours are a necessity.

10 Must-Know Real Estate Statistics

Statistics serve as evidence of trends and can be used for planning purposes. Whether you are an investor, homebuyer, home seller, real estate agent or broker, you can learn valuable information from reviewing key statistics. Below is important information for anyone involved in real estate.

1. Carrot predicts that millennials will be responsible for 20 million additional households in the U.S. by 2025.

Plagued in early adulthood by poor job prospects, crippling student debt and a devastating recession, millennials are finally coming out from under the many challenges that made it difficult to buy their first home. Now in their late twenties and thirties, this large group of consumers is poised to become a sizable economic force in the 2020 housing market.

2. HousingWire cites CoreLogic’s prediction that the U.S. housing market continues to cool, growing more slowly in 2020 in pricey housing markets.

Home buying Institute cites Zillow’s prediction that home values will increase 4.1 percent in 2020, slowing from a 6.6 percent rate over the previous year. Home prices have simply gotten too expensive for the majority of buyers in high-end markets which explains part of the reason for lower sales figures. While price gains are generally viewed favorably by investors, eventually they are forced to align with market conditions that will always respond to supply and demand levels.

3. Based on current findings, Forbes reports ATTOM Data Solutions’ conclusions that prove that renting is a more affordable alternative in 59 percent of housing areas with purchase prices becoming unaffordable as they outpace wages in 80 percent of housing markets.

While rental rates generally trend upwards in housing markets where purchase prices are rising rapidly, they are still considered to be a more practical alternative for many buyers anxious about paying too much for a home in a hot market.

4. HousingWire published that 44 percent of renters surveyed claim that high rental rates create a barrier to homeownership.

If you are paying a large percentage of your income for rent, it is much more difficult to save money for a down payment to buy a home. Even the best loans with lower down payments still expect buyers to show they have some reserve money saved for unexpected expenses that can arise.

5. The National Association of Realtors found that an estimated 50 percent of buyers used the internet to search for a home with that number increasing to 93 percent for people under 36 years old.

The market is changing and buyers are looking to the internet to get the information they need. This insight is invaluable for listing agents searching for the best way to promote their clients’ properties for sale.

6. Carrot reports Mashvisor findings that claim sellers receive offers for 98 percent of the asking price on average.

Contrary to popular belief, the real estate deals that people brag about are overstated. While there is no doubt that some lucky buyers pay less than market value, the fact is that sellers are currently getting close to asking price since the limited inventory on the market makes it almost impossible to drive a hard bargain.

7. CNBC reports that staged homes sell for an average of 6 percent higher than the listing price.

Buying a home is an emotional purchase. The statistics don’t lie. Staging a home to look its best translates to a higher selling price.

8. Smart with your Money reports typical buyers look for a home for 10 weeks and view an average of 10 homes before buying.

It is always nice to have some idea about what to expect as a real estate agent. This data sheds some light on typical buyer behavior so new agents know what the norm is when buyers begin shopping for a home.

9. Carrot reports that homes sell 68 percent faster using drone aerial photos.

Drone aerial photos can showcase a property in a way that regular photographs can’t. Specifically, properties with an impressive footprint show well from overhead.

10. Carrot found that 70 percent of sellers want to list with an agent who uses video marketing for promotion purposes.

Video is the future. Societal norms have changed as consumers tune into Netflix and YouTube preferring videos to mundane written data. Smart real estate agents who use videos will reap better results.


The real estate industry is filled with optimism in 2020 despite a slower growth rate. With mortgage rates predicted to remain lower than five percent, the demand for housing is expected to continue.

Millennials entering the market are driving the demand for starter homes while prices are starting to cool down for luxury homes.

Source: linchpinseo