The real estate market forecast for 2020 is rolling out! Experts are weighing in with their predictions for the coming year. What will buyers and sellers likely find when contemplating jumping into the real estate market in 2020?

Home Buying Power

From 2018 to 2019, mortgage rates dropped from an average of 4.54 percent to lows near the 3.6 percent range. Dropping almost a full percent, this resulted in a boost to buyer’s buying power!  The Mortgage Report estimated a $30,000 increase in buying power!

This means you may be able to afford more home than you thought you could – with reasonable monthly payments!

There are no guarantees of how long this will last, but economists agree rates should stay very affordable in 2020.

The main problem is finding something to buy…

Supply & Demand

One of the major problems the real estate market has faced in the last few years in lack of inventory. While rates have bolstered buying power for most buyers, they are still having problems finding homes to buy.

Experts are predicting overall buyer demand will remain robust in 2020. Millennials turning 30 this year account for 4.8 million people hitting the peak home buying age.

Nationally, there is 3.9 months of home inventory available. Locally, as of November 2019, we have 2.3 months of inventory. What does that mean?

It means we still have a shortage of homes available for the demand in the real estate market – particularly entry level homes for first time buyers.

The number of homes available priced at $200,000 and less, declined 8 percent from 2018 to 2019. Not great for first time home buyers entering the real estate market.

Most experts agree the inventory shortage will continue into 2020.

Continuing Upward in 2020

While experts don’t necessarily agree on the percentage rate of sales price appreciation for home owners, they do agree it will change for 2020.

Estimates are anywhere between .8 percent to as high as 7 percent in home price growth, depending on who is talking. Some say it will flatten out this coming year and others still see the larger percent in growth.

Combining home price growth for sellers with low inventory and fantastic mortgage rates for buyers, it’s still predicted to be a Seller’s Market in 2020.

Midwest and South Expect Uptick

Economists say the Midwest and South real estate secondary markets are more affordable than the coasts. Buyers have been migrating inland for the past few years and they see the trend continuing. These markets are considered “more affordable” than their insanely expensive coastal counterparts.

Another couple of reasons these areas are popular is older Millennials are looking for family-friendly neighborhoods while Baby Boomers are looking to retire.

Competition is expected to heat up in areas like Indianapolis, Cincinnati, Tampa, Charlotte and Cleveland where inventory is being snapped up at a quicker rate.

Last year, 1 in 10 homes faced bidding wars. One economist expects that number to be more like 1 in 4 homes that may be experiencing competing offers in 2020.

Buyer’s may have to up their game when it comes to offering on their dream home!

Predictions from the experts for 2020:

• Continued tight inventory – particularly in the hot Midwest and South Markets
• Home sales price growth predicted to increase anywhere from .80 percent to 7 percent
• Mortgage Rates are predicted to stay very affordable during 2020
• Continued Seller’s Market in the Indianapolis local area

In a nutshell, the real estate market forecast for  says there are definite advantages for buyers and sellers. It’s a good time to buy and sell!