Just starting a new year, a lot of people are anxiously waiting to see what the real estate Seminole market, especially housing, holds in store. There are some subtle signs that the demand is “softening,” so both buyers and sellers are panting to ask if 2020 is going to be a year for Seminole buyers or sellers. The only way to make the forecast with any certainty is to evaluate market trends and look at the trajectory carefully. So here’s what buyers and sellers ought to know about the 2020 real estate market.
Inventory May Be Stabilizing
Over the past few years, a seller’s market has been seen as inventory was fairly low. For less houses on the market, buyers have fewer options and thus less power to bargain, which tends to drive up prices.
“Zillow announced that in each of the last 42 months, the housing inventory of homes available for sale has dropped YOY. As a result, buyers had to compete for a limited pool of properties that, in turn, had helped keep house prices rising.” This had, of course, led to placing sellers in the driver’s seat for the past several years at the cost of a buyer’s market. “But now this pattern seems to be moving in the opposite direction.”
In 2019, the rate of decline in inventories began to slow. This indicates that inventory will begin to stabilize in 2020 – and may rise afterward.
According to industry watchers there is one sector of the market where things remain the same. While the overall inventory started to shrink this year, the inventory issues on the low-end price points are still present. Homebuilders obviously don’t improve availability of these homes. The upper-end market has an ample inventory, so the housing shortage is really on the mid-priced and low ends.
Price Growth and Appreciation Slowing
Another sector of the 2020 real estate market which will see a continued trend reversal is home price growth and appreciation.
Home prices and appreciation levels have been significantly above historical norms in most major markets for several years now, with both experiencing prolonged periods of acceleration. “In July 2018, home values in the US housing market rose at a faster rate than in July 2017, according to Zillow. Add to this the decline in inventory year-over-year and you’ll get why sellers have the upper hand in the previous two years.”
But on that front things began to change in 2019. “The median price of newly built homes has gradually moderated after 7 straight years of increases,” the industry experts say. “However, growth in appreciation rates has slowed in virtually every major metro market and is expected to remain steady during 2020.”
Nevertheless bear in mind that these rises continue. It’s just that at a more modest pace, they do so.
Interest Rates Dropping
The dropping interest rates on mortgages are a truly important phenomenon in the real estate Seminole market in 2020. This might be one of the most hopeful signs that a buyer’s market will open in 2020 – or not.
According to the new Primary Mortgage Market Report by Freddie Mac, “the interest rate for a 30-year fixed mortgage loan has fallen (again!).” However, “interest rates of all forms of mortgage loans have in fact followed a downward trajectory for most of 2019. Tariffs started at 4.5 per cent the year and fell to 3.49 per cent, “the lowest since October 2016.
But the strange thing in all this is that not a lot of buyers seem to be taking advantage of these lower rates. A survey by the National Association of Home Builders found that in the coming year, only 12 per cent of adults planned to buy a home. “That is down from 14% in 2018 and the third consecutive year-over-year decline.” Expert speculation has it that while mortgage interest rates are down, the down payments have not been affected and so many people still find it difficult to enter the housing market.
The Kind of Market
So will the property market be a buyer’s market or a seller’s Seminole market in 2020?
Although it has been a seller’s market for the past couple of years, the conditions that made it so seem to ease up a bit. That is, as we have outlined above, inventories are increasing, price increases and growth in appreciation are slowing down, and interest rates on mortgages are falling. So it looks better for buyers but for sellers it still has many benefits.
Here’s how those in the know characterize the 2020 real estate market: “While these patterns are clear, it is far too early to call the US a buyer’s market. In other words, the US housing market could be characterized as the market of a seller-but not a typical one.”
What this ambiguous pronouncement seems to mean is that while sellers still have a slight edge, buyers with more favorable conditions are gaining ground. So both sides are looking good and (hopefully) everyone is winning.
A Good Agent Becomes More Valuable
So that’s the real estate market climate in 2020–a non-traditional seller’s market where conditions start benefiting buyers a little bit. And this would seem to indicate that in 2020, a good real estate agent will become an even more valuable asset (for both buyers and sellers). Find out how our agents can help you make sense of the real estate Seminole market’s swirling flux by 2020.