Lifestyle real estate newsletter | january 2020
2020 Real Estate predictions At the end of each year I review the essentials that made the current real estate market and then look ahead to predict what’s in store for the upcoming year. Below are market predictions for 2020 based on data that was available as of December 15, 2019.
2019 Summary
Our national real estate market had a strong recovery from the recession over the last decade. Our country saw strong economic growth, low unemployment (which reached a 50-year low in September), and strong gross domestic product (GDP). This led to high demand for housing and strong house price growth for several years (more modest growth last year). Demand was also driven by interest rates which continued to be at historic lows allowing for more buyers with more buying power. However, buyers were hampered with lack of inventory caused by high demand, lack of new construction, and subsequent high price growth, choking affordability. In other words, high buyer demand was impeding more buyer demand.
Although inventory levels last year improved in some areas and with various types of housing product, lack of affordable housing and the type of housing buyers want are causing an unbalanced inventory situation. Some price points and types of housing are seeing extreme demand while other types and prices are lingering on the market.
What can we expect in 2020?
1. Housing Inventory – One of the biggest issues our country has is the lack of affordable inventory of the type of housing that are in highest demand. One of the biggest themes in 2020 is what I am calling “The Haystack Crisis”– namely, continuing lack of inventory will frustrate buyers because they will be hardpressed to find what they are looking for – the proverbial needle in the haystack. Inventory of some types of housing will be sufficient for the demand – such as the high-end market, larger homes, some rural and suburban areas. However, urban areas, smaller homes in sought-after areas, and affordable homes will experience high demand.
2. Housing Starts/New Construction – Our new construction shortage began accumulating in 2009 resulting in our country in 2019 being 3.24 million units short of where we should be. Our country now needs 1.62 million units per year to keep up with demand for new construction (not including the deficit), the increase in population, and replacement of old structures. Due to builders getting out of the business after the recession, increases in expenses due to lack of qualified tradespeople, rising prices on building supplies and land costs, increased build time and requirements due to water and environmental issues, and increased permitting time, I expect this situation will continue to worsen and may even result in a shortage of 3.98 million units by 2022. 3. Home Price Growth – Nationally the October yearover-year median sales price grew 6.2% to $270,900 according to the National Association of REALTORS®. This was the Continued on the back
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Continued from front 92nd consecutive month of year-over-year gains. I predict that national median sales prices will continue to grow between 3.6%-5.3% in 2020. 4. Interest Rates – Over the last 200+ years, the average interest rate has been 5.18%. We have been spoiled by historically-low rates which is keeping the wheels of our real estate market nicely greased. Although the Federal Reserve raised rates in 2018, they trimmed them back in 2019, trying to boost slowing global growth. I expect they could actually reduce them again. According to Freddie Mac, the average mortgage rate for a 30-year fixed rate mortgage began the year at 4.51% and has been heading downward, bottoming out at 3.49% as of September 5, 2019. As of 12/12/19 it was 3.73%.
N I N A B J O R N S TA L 15117 Main Street B106 Mill Creek WA 98012
There are several issues that may affect the real estate market in unforeseen ways in 2020: Trade wars, political uncertainty, the national debt, the election, and even environmental issues may leave their mark on the housing market. That being said, I am excited to see what 2020 will bring!
For additional information and predictions on our local market, please call or text: 206.730.0962 or send an email to nina@ninabjornstal.com.
Market watch update | see the market trending in your county november 2019
december 2019
King County
Median sale price: $610,000 Average sale price: $740,039 h List to sale price: 99.5% h Months of Inventory: 2.2 i Days on Market: 34
King County
Median sale price: $614,950 h Average sale price: $743,425 h List to sale price: 99.5% Months of Inventory: 2.2 Days on Market: 34
Snohomish County
Snohomish County
Pierce County
Pierce County
Median sale price: $464,000 h Average sale price; $500,623 h List to sale price: 99.7% h Months of Inventory: 1.9 Days on Market: 33 i Median sale price: $355,000 h Average sale price: $389,979 h List to sale price: 100.1% Months of Inventory: 1.9 i Days on Market: 34 i
Median sale price: $465,000 h Average sale price; $502,140 h List to sale price: 99.7% Months of Inventory: 1.8 i Days on Market: 33 Median sale price: $359,000 h Average sale price: $392,672 h List to sale price: 100.1% Months of Inventory: 1.9 Days on Market: 34
I am currently taking on new clients.
The most sincere compliments I receive are the personal referrals from you. Thank you so much! Remember how much fun we had finding your home? I’d love to help them create that memory too.
N I N A B J O R N S TA L 206.730.0962 | Cell or Text nina@ninabjornstal.com
If your home is currently listed this is not a solicitation for your listing, please disregard this mailer. | 2019 Lifestyle real estate by nina