The start of a New Year brings predictions about almost anything you can imagine, including real estate. Here, we’ll share what some of the industry experts are forecasting, along with our own perspective on the very local Westchester market.
Corelogic has made their forecast on price appreciation, estimating that homes in NY State will appreciate by six percent in 2020. Westchester is clearly one of the more expensive markets in the State, and home values at the higher end of the price spectrum have been lagging behind more moderately priced homes. Therefore, our estimate for average home price appreciation in Westchester, taking into account that luxury home prices are still depreciating while lower to mid-price homes are appreciating, is on the more conservative side, perhaps two percent or less, but still positive growth.
ARCH Mortgage Insurance Corp. has forecasted that there is a “minimal probability” of home prices being lower in the next two years. Based on the economic principals of supply and demand, we feel rather confident that will be the case here in Westchester. Our market is still being held back by low inventory of homes for sale, and when demand is strong, which it has consistently been, and supply is low, it keeps prices up.
The National Association of Realtors and its Chief Economist, Lawrence Yun, predict that the number of home sales in 2020 should tick up by 3.4 percent over 2019. The forecast is predicated on “the magical power of low mortgage rates,” according to Yun. This is a national statistic so it takes into consideration various and differing markets across the country. We believe this number is attainable in Westchester, providing there is enough inventory of homes for sale in the most desirable price points.
According to Keeping Current Matters, which bases its forecasts on those of multiple economists, they now estimate the chances of a recession in 2020 at 34.2 percent, down from almost 50 percent just a few months ago. The shift has occurred because more experts now estimate that the economy’s fundamentals are stronger than previously believed. In this, we certainly hope these shifting beliefs will be our local reality.
Eli Beracha, PhD, director of Florida International University’s Hollo School of Real Estate, predicts that 2020 will be a “balanced market,” meaning that it won’t favor either buyers or sellers. Locally, we think it will depend greatly on the price point and location. Unless inventory increases significantly, we think it will still be a seller’s market in the lower to moderate price ranges in most areas, and a buyer’s market at the high end of a given market.
The Mortgage Bankers Association is predicting that interest rates will remain low for the coming year. They are currently ending 2019 below 4 percent for 30-year fixed-rate loans, including jumbo loans, and the forecast is that they will stay in that same range. Rates in 2019 were near record lows and far better than most experts anticipated at the start of the year. We are not the experts on mortgage rates, so we rely on the forecasts of those in the mortgage banking business. Assuming they are correct, this will encourage buyers to make favorable home buying decisions in 2020 and bodes well for our local real estate market overall.
If you are considering buying, selling or investing in real estate in 2020, it’s more important than ever to consult with a LOCAL real estate professional, and to do so at the TIME you’re ready to make any real estate decisions. There are many factors that affect the value of real estate and they are ever-changing and hyper-local. We’re here to help whenever you’re ready! We can be reached at ERAInsiteRealty@msn.com, by phone in our Pleasantville office at 914-769-2222, or visit our website at www.erainsiterealty.com.