At Home Avenue, we believe if you’re planning to buy or sell a home in the Twin Cities this year, you should have at least a basic knowledge of where the real estate market is headed. Last year was a highly competitive year for real estate in the Twin Cities, but in light of recent shifts in our political and economic landscape, things could change. So what might be on the real estate radar for 2020? Here are a few tentative predictions:
What’s All This Talk About a Recession?
You’ve no doubt heard speculation concerning an impending recession, but will it happen? Currently, unemployment rates are low, as are federal rates, but due to the cyclical nature of the housing market and the economy, speculation about upcoming 2020 changes is only natural. Even in light of recent political occurrences, experts predict a 2020 recession is unlikely; however, the majority of former recessions weren’t forecasted either. Obviously, no one can foresee what will occur this year, but it’s always a smart idea to remain prepared.
2020 Real Estate Outlook in Minnesota
So what are the Twin Cities looking like in regard to 2020 real estate? For sellers, it’s looking pretty positive; for buyers, it’s not necessarily negative, but the market is still looking competitive for a wide range of price points.
- Interest Rates Holding Steady
Since the Federal Reserve slashed rates three times in the latter half of 2019, don’t expect them to fall further in 2020, especially considering many investors are preparing for the possibility of a coming recession. But, even if weaker sectors of the economy strengthen, experts predict that 30-year fixed rates won’t rise above 4.1% in 2020. Currently, experts predict that rates will hold steady around 3.8%, which still gives prospective buyers plenty of buying power compared to previous years.
- A Seller’s Market?
Buyers might have more buying power, but 2020 is likely to prove a seller’s market due to steep competition among lower price point buyers. Supply and demand are currently at odds due to the influx of younger buyers, and at this point, the Twin Cities don’t appear to be expecting a substantial increase in housing supply throughout 2020.
- Luxury Home Construction on the Rise
Builders are focusing more heavily on luxury construction, so even though new construction is growing, those homes will likely be out of reach for a large majority of buyers. The high cost of building permits, combined with a shortage in the labor market, basically means that more affordable housing supply will continue to fall short of demand.
- Appreciation on an Upward Trajectory
Current property owners and sellers should be overjoyed to learn that experts predict home prices will continue to rise throughout 2020. When demand is high and supply is low—as is the projection for 2020—sellers get a bit more wiggle room in regard to pricing. By September 2020, nationwide home prices are projected to increase by approximately 5.6%, which is even greater than the 3.5% increase seen during 2020.
Buying or Selling a Home? Contact Home Avenue Today
Are you planning to buy or sell your Twin Cities home in 2020? When you work with our expert team at Home Avenue, we’re here for you every step of the way. Over the last 30 years, our flat-fee realty service has sold over 25,000 homes and saved sellers over $175 million. When you need a realty service that keeps more of your hard-earned money in your pocket, you trust our team to serve you well. To learn more about our flat-fee realty service or FSBO listing service, don’t hesitate to call our team at 952-929-7355, or feel free to reach out to us on our contact page.