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| Aspen Real Estate

2020 Housing Market what do experts say to expect?

2020 Housing Market what do the experts say to expect?

Aspen Luxury market is it going against the trend?

The luxury real estate market in Aspen and Snowmass in 2019 is continuing to do well despite opposite trends in other luxury markets across the US. Overall there is less product now than in the past year. According to our market report, the market has flattened somewhat.

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What are the top housing market predictions for the US real estate market in 2020?

In 2019 the rise in home price was slow. The National Association of Realtors predicted median home prices would rise approximately 3.1% from 2018. The NAR predicts another rise in prices for 2020. NAR Housing Stats

According to the latest VeroFORECAST™ report from Veros® Real Estate Solutions, housing data shows average appreciation rate for residential real estate in 100 of the largest US markets will be 3.7% ending June 1, 2020. Markets projected to appreciate the most and the least through June 1, 20220 per Veros® Real Estate Solutions:

 

TOP TEN

  1. Odessa, TX…………………………………………………………………….. +9.7%
  2. Coeur D’Alene, ID…………………………………………………………… +9.5%
  3. Idaho Falls, ID………………………………………………………………… +9.4%
  4. Boise City-Nampa, ID ……………………………………………………. +9.1%
  5. Midland, TX……………………………………………………………………. +8.0%
  6. Bellingham, WA …………………………………………………………….. +7.8%
  7. Spokane, WA…………………………………………………………………. +7.4%
  8. Kennewick-Pasco-Richland, WA …………………………………… +7.2%
  9. Pocatello, ID…………………………………………………………………… +7.2%
  10. Yakima, WA …………………………………………………………………… +7.2%

BOTTOM TEN

  1. Grand Forks, ND-MN………………………………………………………… -1.9%
  2. Bridgeport-Stamford-Norwalk, CT……………………………………. -1.7%
  3. Baton Rouge, LA……………………………………………………………….. -1.6%
  4. Lafayette, LA…………………………………………………………………….. -1.2%
  5. Norwich-New London, CT………………………………………………… -1.0%
  6. Danville, IL ……………………………………………………………………….. -0.9%
  7. Shreveport-Bossier City, LA ……………………………………………… -0.7%
  8. Hot Springs, AR ………………………………………………………………… -0.6%
  9. Jonesboro, AR ………………………………………………………………….. -0.4%
  10. Houma-Bayou Cane-Thibodaux, LA ………………………………… -0.3%

 

See the complete PDf report Complete PDF Report

According to the Goldman Sachs forecast Global economic growth will move from 3.1% in 2019 TO 3.4% in 2020

That is still slower than in 2018 and 2017 which was 3.8% in 2018 and 3.7% in 2017.

The investment bank states three reasons they are reasonably confident

“First, the sharp drop in mortgage rates has reinvigorated the housing recovery after a slowdown in 2018 and early 2019. The structural outlook for housing is also strong, as the level of building activity remains well below demographic demand.”

Goldman Sachs

Millennials in the US housing Market 2019 and 2020

Millennials have a strong desire for homeownership. The oldest millennial will be turning 29 this year they also make up the largest segment of buyers.

The consensus is that 2020 will be the peak millennial home buying year. Furthermore, remember that supply and demand affect the housing market. So, this pent-up demand from millennials in 2020 is likely to move home values up across all price points.

The Baby Boomer generation is part of the challenge for this younger cohort, as many are choosing to age in place—keeping more homes off the market than ever before. Making it harder than ever to purchase a home.  In fact, a recent study from Freddie Mac shows that if today’s older adults—those born between 1931 and 1959—behaved like earlier generations, then an additional 1.6 million homes would have hit the market by the end of the last year.

More on millennials

The luxury housing market in 2020 is taking a hit. According to By Craig M. Douglas  – Director, Editorial Research & Analysis, The Business Journals,

Oct 3, 2019, 12:00pm EDT

The August surge in existing home sales and permits for new inventory stopped just short of Americas wealthiest neighborhoods.

Among the 100 most exclusive neighborhoods, where median home values topped $3 million and a monthly mortgage payment averaged just under $13,200 in August, the average annual income required to buy a home was $526,759

In New York City’s Upper East Side, home to Park Avenue and the nation’s most expensive ZIP code (NY 10021) with a median value of $15.4 million, a new buyer would have needed roughly $2.7 million in annual income to break into the market. Some 22 of the 25 most-expensive ZIP codes in August were in New York or California, with outliers in Colorado (Aspen and Snowmass Villa See the full article

 

According to Redfin, the nation’s priciest homes are far less in demand The average price of a ‘luxury’ home, which Redfin defines as the top 5% in each of the 1,000 cities it tracks, fell 1.6% to $1.55 million. Nonluxury homes saw their average price rise 2.7% annually to $300,000. Redfin ‘s chief economist, Daryl Fairweather states “Demand for high-end homes is waning in large part due to changes in tax law. The amount of state and local taxes that homeowners can deduct was capped at $10,000, and the mortgage interest deduction was reduced from $1 million to $750,000 in mortgage debt.” While Q1’s stats represent a rebound of sorts, Redfin Chief Economist Daryl Fairweather said the minor price gain, coupled with a dip in sales and an uptick in supply, suggests the market for luxury homes will continue to be tepid.

“Luxury home sales have been relatively soft since early 2018 when the tax code overhaul made it so that people with big mortgages and those living in high-tax states and counties couldn’t deduct as much from their annual tax bill,” said Fairweather. “But wealthy Americans who would otherwise be considering a multi-million-dollar home purchase may now be a bit spooked that the economic expansion they’ve been enjoying for the past decade could soon be nearing its end.”

“Luxury homes are selling slightly faster than they were last year. The typical luxury home that sold in the second quarter went under contract in 68 days, down slightly from 71 days a year before. That’s the fastest luxury homes have sold in at least a decade. The typical non-luxury home that sold during the same time period went under contract seven days faster than a year earlier, in 56 days.” https://www.redfin.com/blog/q3-2019-luxury-housing-report/

2019 housing Data

CNBC luxury homes sales

 

 

 

 

 

 

 

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