First, a quick look back
Before we look ahead to 2020, let's take a quick look at what happened in the real estate market in 2019! At this time last year, economists were predicting rising interest rates (they were wrong!) and modest home price growth (they were right).
Locally, prices were down both in Seattle and on the Eastside. This is largely a result of the significant price increases that took place at the beginning of 2018 when the median price of a single-family home in Seattle hit an all-time high, $802,000 before dropping below $700K by the following January.
The market has stabilized since then. Prices rose through the Spring season this past year, but ended the year right where they started, finishing the year with a median home price of $700,000. The number of homes for sale increased last year by nearly 15%, and the total number of closed sales rose by 10%.
Each year Windermere produces a report that includes a complete overview of how our local markets performed. To view the full report, click on your area below:
SEATTLE | EASTSIDE | MERCER ISLAND | CONDOS | WATERFRONT
Where's the market headed in 2020?
We're taking another look at economists' predictions for the housing market this year. Here are a few common threads you'll find:
A recession is unlikely in 2020, but highly likely in 2021. Most economists will be quick to point out that home prices do not typically fall during a recession. Of course, if you owned a home during the Great Recession, you may not be so optimistic!
Bidding wars are expected to make a comeback this year as a result of fewer homes for sale and lower interest rates.
Interest rates will remain low in 2020 (3.8-4%).
Residents of expensive coastal markets will continue to migrate to smaller, more affordable cities like Charlotte and other areas in the Southeast.
Windermere
Home prices will continue to rise as mortgage rates remain very competitive. Look for prices to increase 3.8% in 2020 as demand continues to exceed supply and more first-time buyers enter the market. In the year ahead, I expect the share of first-time buyers to grow, making them a very significant component of the housing market.
Many economists, including me, spent much of 2019 worried about the specter of a looming recession in 2020. Thankfully, such fears have started to wane (at least for now). 2020 year will still be very positive from a home-financing perspective, with the average rate for a 30-year conventional, fixed-rate mortgage averaging under 4%. Read more.
Zillow
With the housing market stabilizing from the drama of the early years of home price recovery and the subsequent slowdown during 2019’s home shopping season, we have a rare moment of calm to reflect on what housing might look like in the year to come.
If current trends hold, then slower means healthier and smaller means more affordable. Yes, we expect a slower market than we’ve become accustomed to the last few years. But don’t mistake this for a buyer-friendly environment – consumers will continue to absorb available inventory and the market will remain competitive in much of the country. Read more.
Redfin
We predict the housing market will be more competitive in 2020 as the cooldown that began in the second half of 2018 comes to an end. Charleston and Charlotte will lead the nation in home-price gains, thanks to homebuyers moving in from expensive cities.
Hispanic Americans will experience the biggest gains in home equity wealth. Climate change will become a much bigger factor for homebuyers and sellers. Read more.
What does 2020 hold for you?
If you're considering a move this year, let's start the conversation now! It's never too early to start planning, whether you're interested in a move, an investment purchase, or even a remodel.
I'd love to share my experience and help guide you to the right folks to assist you at every stage of the process. Let me know how I can support you wherever you're headed!
Best,
Chad