Is the Spring Market Here?
The severe shortage of homes for sale is upending the sales calendar for the whole housing market. Spring has historically been the busiest buying season, but as competition for homes heats up across the country, January is the new April!
A strong job market and low mortgage rates should sustain the housing market in 2020. The problem will be finding enough homes for buyers. With unemployment at a 50-year low and interest rates well below historical norms, the real estate industry is being dragged down by low housing inventory, particularly in the mid to low price ranges Homeowners are staying put longer and fewer homes are being built, creating a bottleneck.
Sellers in 2020 will contend with flattening price growth and slowing activity, requiring more patience and a thoughtful approach to pricing. Sellers of homes priced for entry-level buyers can expect the market to remain competitive and prices to stay firm. At the upper end of the price range, however, properties will take longer to sell, and incentives will be needed to close deals. As the market moves toward a more balanced scenario, sellers who adjust to local market conditions can expect to benefit from continuing demand.
Buying a home in 2020 will offer opportunities for some buyers, as the supply of new homes alleviates some of the inventory pressures. While the inventory of new homes in 2019 remained focused on the high-end, as the luxury market cools, builders signaled their intent to increase offerings in the mid-price segment, a much-needed shift in market dynamics. First-time buyers will continue to struggle with affordability, even with mortgage rates in an approachable range, as entry-level inventory is expected to remain constrained.
If you are thinking about getting in the market, the earlier the better!