2020 Real Estate Market Predictions
2019 has been a great year for real estate. Despite predictions to the contrary, we have seen another year of growth in the market. But the question is, will this continue in 2020?
Key indicators are leading me to predict another strong year in 2020. Unemployment is low (2.8% in San Diego), incomes are rising at a good rate (just over 3%), home values rose at a sustainable rate (4% in San Diego), and new home construction in San Diego still lag housing demand. Interest rates remain very low (below 4% as of this writing.) Sales have remained strong in 2019 (over 36,000 sales.) Investors (house flippers) are still buying at record rates.
Another positive impact on home values is the new “Rent Control” law. Though rent control sounds like it would be problematic for landlords, it actually may cause housing to go up in value. That’s because the State of California will allow 7.5% to 8% rent increases annually, which is higher than average. With rental property values being tied to the rent collected as well as rent itself becoming more and more costly, property values should increase with more buyers looking for investment properties as well as those who would rather buy than rent.
Overall, I predict that 2020 will bring a good housing market with steady increases throughout the year. If you’re in the market (meaning you own real estate), stay in it. Some “rules”:
Ultimately, you should never gamble with your home. Investment properties? Sure, take the risk. Refinance them, buy more properties, and grow your wealth. But your home is your home. Don’t jeopardize it!
Final note: If you like to monitor the value of your home, I’ve set up a website for you: www.findmyhomevalue.org. By entering your home address, you’ll receive an email monthly with your updated market valuation. And if you think it’s wrong, let me know and I’ll help you revise it.
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