2020 Outlook: Healthy housing market to help economy
A consensus economic forecast points to a healthy housing market due to low mortgage rates, a low unemployment rate, consistent building activity, and a continually competitive first-time buyers’ market.
Earlier this month, the National Association of REALTORS® (NAR) surveyed economists for its Real Estate Forecast Summit. Their 2020 projections are consistent with Windermere’s Chief Economist Matthew Gardner whose forecast was presented at the Seattle King County REALTORS® Young Professionals Network breakfast in October.
The Economists at the Summit noted that there are four factors which may deter the production of much needed new housing: cost of construction lending, shortage of labor, shortage of buildable lots, and high regulatory costs. Despite this shortcoming in supply, there is optimism in the market going into 2020, as you can see in the infographic below:
Statistics in this infographic are from the National Association of REALTORS® unless otherwise indicated.
Greater Seattle Area
Gardner projected that there will be economic growth of 2.2 percent in the Greater Seattle Area. The 300,000 jobs (and counting) in the technology industry will contribute significantly to the projected increase of 2.6 percent in total employment.
Millennials and first-time buyers will continue to boost the housing market in 2020 as they strive to move into single-family homes. This group made up 46% of mortgage originations and home sales in quarter two of 2019, as reported by Realtor.com. According to HousingWire, Redfin found that many millennials are choosing cheaper prices and longer commutes as a better trade-off than higher prices and shorter commutes.
Based on the forecast, sellers are likely to see an increasing number of first-time buyers competing for homes.