What will happen with Real Estate in 2020? Should we expect a Recession? Is the Real Estate “Bubble” going to burst? In this video, I discuss my housing market predictions as well as my real estate forecast for 2020.
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Hey guys, welcome back. I’m Jeb Smith, Coldwell Banker Residential Brokerage here in Huntington Beach. And today we’re going to talk 2020 market predictions for real estate, primarily Southern California, right? That’s where I am, but I think this is going to be a nationwide thing. And as we get into it, right now it’s the middle of December, so I’m just going to do a little touch on where we are in the market right now before we get into 2020.
So we’re middle of December, the market has slowed a little bit as we’ve approached, we’re nine days out from Christmas. So this is the time of year when things start to slow down. Buyer demand starts to slow. Inventory has essentially stopped coming on the market, right? You have a few homes coming on here and there, but those are people that really, really have to sell. Otherwise you should be waiting as a seller to list your house after the first of the year, regardless of the competition, right?
So there’s not a lot of inventory right now. And it could be, you could be sold that now’s a great time to list your house because there’s not a lot of inventory and not a lot of people to compete against. But keep in mind, there’s less buyers out there looking, right? Now’s the time where things are going to slow down. It’s going to continue that pace, if you will, through the end of the year. So less properties coming on the market, less buyers out there looking, and then as we start the new year, things will start to pick back up, right? So traditionally, the market starts to pick back up right after Superbowl. So sometime around beginning of February is when we start our spring selling season, which is generally the best time to sell your home. And this year is not going to be any different.
But before I get into real estate predictions and what I expect, I’m going to talk a minute about the real estate summit that happened last week, December 11th I believe it was, 10 of the top economists in the U.S. met to talk about the real estate market predictions for 2020, as well as 2021, what they expect. And they expect it to be a lot like 2019 which is growth. Expansion in the economy. They think unemployment is going to be somewhere around 3.75% next year in 2020, which is where it was this year, which is near all time lows. They’re expecting the GDP to be somewhere around 2.2% this year. I think it was like 1.8%-1.9%. They’re expecting interest rates to be somewhere between 3.75% and 4%, which is essentially where we were this year. They’re expecting appreciation to be somewhere around four four and a half percent. That’s about where we were this year. So it’s starting to look like 2020 is going to be a lot like 2019, which is more or less what I’ve been seeing in these real estate updates for the last six to eight months.
The economy is doing very well. And if you’re a buyer sitting on the sidelines waiting for a huge recession or the market to collapse and what have you, it’s not going to happen, right? So if you’re that person and you’re waiting for the bubble to burst, you’re going to be waiting a while. The market’s going to continue to appreciate this year, 2021 they’re saying looks a lot like 2020, maybe not as much growth, but very similar. And so, if there’s a three and a half to four percent appreciation in 2020 and another three and a half to four percent say in 2021, that’s 8% or so in appreciation from this point forward. So that’s appreciation you’re going to miss out on. Money right now is very cheap. So at 3.75% money is very cheap to borrow. So, even if the market pulled back 8% or 10%, chances are interest rates would go up at that time. So you’d be paying more money to buy the same house.
So Lawrence Yun, economist for and does a lot of work with the National Association of Realtors, basically says that the only thing keeping the market from really expanding even more is just inventory. Right? So we need inventory, we need more properties on the market. And as more properties come on the market, which is going to happen in the spring, you’re going to see prices continue to rise. And that’s been the case for the last eight-nine years. It’s going to be the case in 2020 and, not predicting out as far as 2021, but the economists in that report are talking as far as 2021 something similar to 2020. So, predictions for 2020, they’re going to look a lot like 2019.
If you’re a seller, it’s a very good thing, right? You have control of the market, if you will. There’s not a lot of inventory out there. I’ve mentioned all those things a moment ago. If you price your property correctly, there’s a really good chance that you’re going to get top dollar for it, and you need to do that from the start. It’s not one of those things where you work down to the fair market value, you start $50,000 higher and work down, you need to start at fair market value. If it’s priced correctly, chances are it’ll receive multiple offers. If it’s priced too high, chances are it’s going to sit. That’s the way it works. And that’s the way it’s been working for some time and we’re expecting that to be the same. So, it’s a good time to come on the market right after the first of the year. The spring selling season, as I mentioned, starts the beginning of February. We’re expecting that to continue to be the case.
So if you’re thinking of selling your house now, right now is the best time to start talking to agents. To start interviewing agents, to find out who you’re going to go with, because that agent can start helping you get your property in order so that when you are on the market or when you come to market, everything is already done. So you’re not having those conversations after the holidays and trying to get everything in a rush to get it done quickly. Now gives you ample opportunity to take advantage of time and do those things so that your house is ready at the beginning of spring.
And buyers, if you see a good property, make an offer. Money is cheap, as I mentioned. If it’s priced correctly, chances are you’re going to be dealing in a multiple offer situation. I’m working with a lot of buyers right now where there are multiple offers. We’re getting multiple counters back on multiple properties. So the market is still moving. It’s the holidays. Things tend to slow down. This year is pretty much the same. But, there’s still buyers out there looking and putting multiple offers in on properties. So as the spring rolls around, as a buyer, be prepared for that. Make sure you’re pre-approved. Do all the things that you need to do beforehand so that you’re in the best position to make an offer at that time.
So again, 2020 is going to look a lot like 2019. There’s not going to be a recession unless something crazy happens between now and middle of next year. But there’s not going to be a recession. The market is going to continue to move onward and upward. Money’s going to remain cheap. And if you’re a seller, considering selling your house, talk to an agent. If your local, would love the opportunity to have that conversation and help guide you in the right direction. If you’re not in my market, reach out any way, I can refer you to somebody that does a similar business model as me, which is a very relational model because I network with these people and I’m happy to put you in good hands with somebody you can trust. And so if you’re watching this from somewhere else, feel free to reach out and I’ll put you in touch with those people.
And as a buyer, if you’re starting to think about the process, now is a good time to get yourself in order to put yourself in the best position so that when the the right house does come on the market, you can make a move.
So as always, I appreciate you taking the time to watch this video. If you’re still here watching and you found value in this, do me a favor, click the like button. If you’re not already subscribed to my channel, do that as well. It helps more people see it, the more people that subscribe. So as always, I appreciate you taking the time to watch. Merry Christmas and we’ll see you again soon. Have a great day. Bye bye.
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