Team Taylor - January 2020

JANUARY 2020

205.979.8500 | WWW.MYNEWBIRMINGHAMHOME.COM

Surprising Predictions About the 2020 Housing Market THE HOUSING MARKET IN 2020

As we ring in the new year, many are anticipating the changes 2020 will bring. With the election and other significant events happening in the coming year, many homeowners are wondering how the housing market will be affected. Now I’m not a betting man, but from my years in the industry, I do have some reliable expectations of the market in 2020. If you’re concerned about the effects the election may have on the market, here’s why you shouldn’t worry. Housing affordability will remain stable or even improve compared to the pricing of 2019. From 2019–2020, I expect interest rates to lower. In 2019, interest rates were a full point lower than they were in 2018, and we have seen consistent decreases from 2018–2020. Housing inventory should increase, but it’s currently so low that a 20% increase wouldn’t be enough to increase prices through the election. Be aware that changes in demand may affect certain aspects of the market, however. If you’re looking to move up, this is the best time to buy. Particularly in the luxury home market, more people are looking to scale down. As a result, the move-up home market is more attractive to sellers. This isn’t due to the election, but instead due to changes in lifestyle for both baby boomer and millennial consumers. “If you’re looking to move up, this is the best time to buy. Particularly in the luxury home market, more people are looking to scale down. As a result, the move-up home market is more attractive to sellers.”

The baby boomer generation is more sentimental when considering their purchases. Many want to move closer to their children and find less value in the material objects they’ve accumulated over the years. They find spending time

with loved ones more of a priority than it has been before, making location and community key factors in their home search.

For the older millennial generation, we are seeing an increase in the demand of space as the driving force for their home needs. This positions them perfectly for the move-up home market. The current trend with older millennials is that as their family expands, they want to move out of their first (often smaller) home. This makes the move-up market less competitive in comparison to the other markets. As the move-up

housing market transitions to a seller’s market, it leaves many looking at their options outside of buying.

—Drew Taylor 205.283.1602 drew@taylorsold.com

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