Business quarterly: Forecast for 2020 real estate market

  • Bill Taylor Courtesy Photo

Published: 1/14/2020 1:33:08 PM
Modified: 1/14/2020 1:32:19 PM

What’s the forecast for the 2020 real estate market? The short answer is more of the same. All of the indicators appear positive, and in terms of interest rates that’s pretty good news. Demand is still high, but supply is extremely limited as it has been for more than a year. One very important factor in the Monadnock Region’s real estate market to keep in mind is that national indicators don’t always accurately tell the story for our neck of the woods. We generally catch up, but some trends take a little longer to get here. For the purposes of this year’s outlook, the trends are pretty spot on, though.

Interest rates are a major driver of the entire economy, but more specific to real estate they have incredible impact. In general rates have remained historically low through the past decade, with really only relatively minor fluctuations.

Right now average rates are hovering around 3.75 percent for a 30-year fixed mortgage, about a full percentage point below this time last year. Is that good news? Sure it is, it means more buying power. But low inventory can drive costs up, and nationally that’s expected, but locally I wouldn’t count on too much more upward pressure on price. All the experts seem to agree that rates will stick pretty close to where they are now, with Fannie Mae expecting rates to hang around 3.5-3.6 percent. Interest rate outlook for 2020 equals very good news.

Demand indicators remain high, also good news. Here’s an interesting fact from 2019, Realtor.com reports that Millennials made up 46 percent of all new mortgages. I’m not a big fan of the labels, but that’s pretty huge. The opposite side of the label coin is the Boomers, and the news on that group is that they are staying in their homes longer and therefore causing a gap in what’s expected for inventory. Keep in mind, that’s national stats, and while in my experience they are pretty much in line locally the numbers fluctuate.

I’m long winded, I know, but this is important stuff and I’ll get to wrapping it up.

Bottom line: 2020 looks great with really no negative outlook for buyers or sellers. Any increase in price driven by strong demand and low inventory is basically balanced out by lower interest rates.

So for buyers and sellers the takeaway is the same, 2020 is a good time to make a move. One thing I have learned in 16 or so years in this business is that there are always people that need a bigger house, always people that need a smaller house, and jobs change and people have to move. Those factors don’t change. Happy New Year, and may your housing goals come true this year!

Bill Taylor is a licensed real estate agent with Better Homes and Gardens Real Estate The Masiello Group in Peterborough.


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