Wondering what real estate trends to be on the lookout for next year? Here, RISMedia revisits some interesting patterns from 2019 to predict three things that likely will happen in 2020.
1. Generational shifts
In combination with the millennial market and the Silver Tsunami, experts are predicting more of a demand for affordable inventory that is both senior- and starter-home friendly.
As millions of Americans enter their 60s and 70s, there is potential for various impacts on the housing market in the coming years. Senior housing demands often mean downsizing and cost-saving, so the market could see a higher demand for smaller, more affordable inventory. Because the inventory of these smaller one-level homes is usually limited, competition could increase.
It’s also time to welcome more Generation Z shoppers. According to a TransUnion report, the number of those in the Gen Z category who took out a mortgage has more than doubled in one year.
Year-over-year growth was 112 percent compared with 12 percent growth from millennials. Similar to millennials, Generation Z is laden with student debt. That means smaller spaces and affordability are key.
2. Recession facts and fears
Many experts predict that a recession will hit the U.S. economy around 2020-2021; however, this time around, the housing market will not be the cause. And there’s also a good chance that it won’t be hit as hard as other economic sectors.
Because of some positive signs — such as a low unemployment rate, stricter Fed lending policy and steady/increased housing prices — experts predict that real estate actually is becoming a more balanced market. The most optimistic predictions lean toward a smooth descent into a balanced market, rather than a crash.
However, it’s important to be cautiously optimistic (and prepared). Recession fears, whether they’re warranted or not, could lead to seller hesitation, and that could exacerbate an already low-inventory market, with first-time buyers wanting to snap up good deals and sellers waiting until prices rise.
3. Return of the suburb
Census data is showing that the “back to the city” trend of the early 2010s is shifting. City population growth has declined, while suburban growth has increased. The move toward suburbia could be caused partly by the tapering of the Great Recession, allowing mobility (particularly for millennials) and the ability to purchase homes.
Because millennials are now having children, the rise of suburbia makes sense. They want the stability and affordability of what the suburbs offer; however, they still want some of the city-like amenities to which they’ve grown accustomed.
And so, the term “hipsturbia” was born. Essentially, it means “cool” suburban communities that are more walkable, accessible and fun. The trend is cropping up in the suburbs of L.A. and San Francisco.