In terms of inventory, homeowners continue to live in their homes and pay off their cheap mortgages. Why aren’t they moving? That’s still the big, unanswered question, and there doesn’t seem to be consensus on the answer.
On a fundamental level, people move because they need something: more or less space, a yard, a particular school district, special services or proximity to work, family, friends or a house of worship. If a job is lost or won, and family income is affected, that could push a family to buy or sell property. If someone dies or is born, the change in the size of the family could do the same.
What seems to be happening is that people are working longer, so there’s no need to move for a job or retirement. And if your children haven’t settled down, married or partnered up and started having children of their own, you might decide to wait a few more years to see where they settle before deciding where you’ll settle in retirement.
If you’re thinking about selling in 2020, you should keep an eye on location and national trends. Millennials are starting to marry and have children. Where they decide to move could influence home values dramatically. Companies in the suburbs see more of their millennial and Gen Z employees staying in more diverse, urban areas and are either finding ways to make the commute by public transportation palatable (since these generations don’t love driving) or are moving back to the city.
Despite what’s going on in Northern California, the overall real estate market is slowing. In 2020, Zillow and the National Association of Realtors expect home price appreciation to slow down to around 2.2 percent. That’s a median number, so in places like Northern California, where millionaires are minted every time a tech company goes public and there aren’t nearly enough homes for everyone who wants them, you can expect to see home prices rise dramatically. In places like the North Shore of Chicago, in suburbs like Glencoe, Winnetka and Kenilworth, home values may shrink by 1 to 3 percent, or more.
In a presidential year, you would expect real estate to slow down a little bit. This, however, is the first presidential election year with full employment, almost historically low interest rates and a strong economy. It’s possible that we’ll look back in a year and say that 2020 was another strong seller’s market.