The explosion of the financial crisis in 2007 left thick clouds of dust in the air for most of the last decade. In 2019, we could finally start to see through the dust, and catch glimpses of what the future of our industry is actually going to look like.
In this new era, the future will start to take form.
The dust will be cleared, and the path forward will be laid, not only for the next decade to come but for the new century. The trends dominating 2020 will foreshadow the themes we’re likely to continue to see throughout the next 10 years.
Here are the residential real estate trends you need to know about in 2020.
The Amount of Investment In Real Estate will Continue to Increase
In 2020 we will see an increase in market capitalization across the real estate sector. The most capital will be funneled to rental, development and office properties. Interest in these property types comes primarily from the rise of logistics and a shortage of affordable housing.
Legislation for Affordable Housing
Unfortunately, salaries in major cities aren’t expected to get up-to-speed with rising home costs. This means that the number of renters will continue to grow. However, the government will start doing more about the issue in America’s urban cores in 2020.
In 2020, Minneapolis was the first city in America to discontinue single-family zoning restrictions, in an effort to create more housing options. Expect affordable housing to be a major talking point during the 2020 presidential election, and to see new legislation from 2019 start to come into effect in various states, and even more state and federal rulings to be made.
Millennials Will Become the Largest Age Group of Property Buyers
Finally, Millennials are leaving mom and dad’s house and getting their own places. In 2020, they will continue to dominate the market as the top demographic of home buyers. Millennial buyers’ interest in upper-middle-class and luxury homes will cause an influx of these properties to enter the market. Expect to see more, innovative ways to attract this group of buyers through digital marketing.
Technology will Continue to Expand Our Understanding of What It’s Capable Of
Property technology will continue to change our idea of how technology can be used in every aspect of the deal-making and property management process. Technology will evolve the idea of amenities. As our urban cores become smart cities and IoT is integrated into new developments, we can expect to see more mobile, cloud-driven tools made to enhance the tenant experience.
Mortgage Rates will be High in 2020
Higher mortgage rates will impact buyers and sellers, the good news is that this increase will only be temporary. Interest rates on 15-year mortgages are expected to rise to 4.4%, and 30-year mortgage interest rates will rise to 5%. Sellers can expect to get fewer offers because more buyers will be postponing their home purchases until interest rates decrease. Unfortunately, fewer people borrowing from lenders means that interest rates may take longer than expected to decrease again.
Understanding market trends on a deep level is a major value add a real estate agent can bring to your home buying and selling process. Click here to align yourself with insider knowledge before you enter the deal-making process.