Housing market predictions for 2020 point to opportunities for strategic agents

US Housing Market Predictions for 2020: Reversing the Trends

Only a short while ago, homes were selling quickly and at record-high prices. Across the entire US housing market, buyers experienced unprecedented anxiety, forced into bidding wars for highly sought-after properties.

But toward the end of 2018 and heading in to 2019, we began to see two major trends affecting that imbalance – a growth in inventory, and subsequently, a decline in sale prices. The US housing market has begun to shift from a seller’s market to a much more balanced market, and housing market predictions for 2020 are forecasting along the range of equilibrium to an all-out shift toward buyers.

Additional inventory is of course advantageous for buyers, while the spike in prices (which we are still experiencing in many markets) is a clear benefit to sellers. Based on the major indicators that underscore market performance, such as employment, GDP, and interest rates, the overall portrait of the 2020 housing market will not be recession, but a supply and demand driven market with more selection (and better prices) for buyers. In some pockets across the country, we will indeed enter into a buyer’s market, depending on the local economic forces at play.

So, sellers will soon find themselves once again in a position where they must really work hard and smart – from setting their price correctly, to strategizing their marketing, to negotiating the fine points. If not, gone is the guarantee that their house will sell instantly, or even in a reasonable amount of time. Still, balanced market conditions are not totally unfavorable for the seller, or their agent.

Agents poised to win in the shifting market are positioning themselves as experts who know the local prices and conditions, know how to properly prepare and market a home, and can show homeowners the above-average results they have gotten for other sellers. Below are three ways strategic agents will come out ahead in 2020.


No Housing Market Bubble means No Housing Market Crash

First off, it’s important to note that since humans first started trading real estate, the housing market has been predictably cyclical – prices always go up for a while (sometimes spiking drastically), then down for a while (sometimes falling hard). But this has been for a reason. It’s well known that what preceded the Great Recession of 2008 was a bubble in residential real estate, which deflated as quickly as a popped balloon with the slightest poke.

With the housing market enjoying the nation’s longest economic expansion in history (over 120 consecutive months); the real (and rather suspenseful) question inevitably arises: Is there a bubble now? And is the worry of a looming, foreboding recession valid? Prices seemed to rise quickly and hit new highs, so will prices fall even more dramatically?

The short answer:

There was no bubble, nor have there been any economic indicators drastic enough to suggest a housing crash coming our way. There’s no interest rate bubble, no stock market bubble, and most assuredly, no national housing market “bubble.”

We are not overbuilding in terms of new construction versus underlying population growth. Prices rose over the last decade in response to supply and demand; the buyers have been heavily vetted by banks following the sub-prime mortgage crisis, and economic opportunities and employment have been steadfastly supporting demand for housing. Prior to the Great Recession, we experienced reckless lending, buying, and investing practices that are no longer tolerated.

One may wonder, however, how can home prices be climbing faster than the rise of inflation if there is no property bubble? Well, it comes down to “scarcity.” As incomes rise, demand for housing follows like a straight line. In many areas we saw staggering housing appreciation because so few homes were being sold, and new development was restricted or downright impossible. For example, developers who attempt to erect a new residential development in Silicon Valley or Seattle are met with scores of regulations, red tape, and scarcity of available land. Prices go up from the constriction of supply. So often, housing prices are inched or ratcheted up by these kinds of shortages in various communities. It’s a much healthier form of appreciation than, say, millions of unqualified buyers entering the market with poorly underwritten loans.

We are – and have been for a while now – building roughly in line with the measured underlying growth of demand. We can expect small temporary dips within new housing construction in the next few years to come – but certainly no bust.

These days, the business press and the internet is chock full of an array of different predictions of recession. But historically, economists are comically inaccurate when touting their scary recession admonitions. As magnetic and believable as that rhetoric can be, it’s always best to look at the historical (and the current) hard data – or listen to those who clearly display that approach when informing others. In this technological era of fact-checking, it’s always easy to find the truth, which is primary to keeping any business alive in the always-changing world of real estate. Ultimately, discovering that the future does not look awful or threatening for real estate (not even by a long shot) – should come as a welcome relief for those who always have their eyes on the horizon – a horizon that is fortuitous for smart agents, for the foreseeable future.


3 Ways Agents can Benefit in the 2020 Market

housing market 2020

As sales and demand slow down, and as growth in inventory continues to ramp up, supply has increased in many markets across the states. On average, we are seeing active inventory rise 4%, year after year. This recent incline, along with the slowdown in price appreciation, signifies great news for those wanting to buy a home soon. Buyers will have more options, and overall will gain much more bargaining power.

1. More Inventory Means More Opportunity

Clearly, for real estate agents with a good measure of foresight and vision, this is a time of opportunity, not a time to worry or retract. With more inventory and more listings to sell, there’s no shortage of opportunities to seize.The future for real estate is looking rather steady, reliable and luminous. It is possible we’ve learned from our mistakes in the past – because in the past decade, every time a housing bubble begins to inflate, we manage to stop pumping in the air.
housing market 2020Many agents are ramping up marketing efforts now, in anticipation of all the new inventory expected to hit the market in the coming years. We’ve seen over fifteen percent growth in new business here at Discover Publications; with steady marketing and sales efforts, this onslaught of new customers must be driven by the changing market. We work almost exclusively with agents in the top 10% of the industry, so these are agents who look for opportunity in shifting housing markets. They are eager to share their market knowledge and get their value proposition in front of potential sellers.

2. Sellers Need Good Agents

It’s important to not just stay the course with your marketing going in to 2020, but to consider the medium and messaging of your marketing. As sellers face more challenging times, they’ll be curious about how the market is performing and they’ll choose to work with an agent who will get them the best result. For example, in their custom publications, agents are publishing articles about how to strategically market a home to maximize buyer competition, and they are publishing hard statistics showing how they get more money and faster sales for homeowners.

In addition to aggressive farming and marketing efforts, growing your business in 2020 means taking a hard look at what you do differently for your clients. Top agents are #1 for a reason – they go above and beyond to sell homes at the best prices and without the usual hassles. Proactive inspections, home staging, professional photos and videos, extensive price analysis, pre-listing showcasing, on and on.

3. Less Competition as Agents Scale Back

Housing market predictions for 2020 have many agents concerned – but you shouldn’t be. Many agents will likely scale back after a few challenging sales, which will enable you to pick up even more market-share.

Gone are the days when agents can simply list homes on the MLS and earn a good living. With so many online alternatives (and easier ways to sell FSBO), agents really need to work hard not just at marketing themselves, but at marketing and selling homes. The same is true for buyers agents; they must have deep relationships with other agents in order to get buyers in front of the right homes at the right time, for the right price.

Agents who are unwilling to work hard or to work strategically during challenging marketing conditions will fall to the wayside. This presents an enormous opportunity for serious agents; and when markets shift, the opportunity becomes amplified.

Here’s to Winning in 2020!

By offering a solid value proposition and getting your message out to your market consistently, you will find that 2020 presents more opportunities than challenges for strategic agents.

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