Last year, I guessed that our NSDCC sales would drop 20% due to high mortgage rates, and pricing would stay about the same. Rates dropped instead, and both sales and pricing stayed about the same as the previous year.
In 2020, I think we will see sales drop 10%, just because we’re overdue, and guessing that the NSDCC median sales price might go up 2% to 3%.
We’ve entered the World Of Concierge, where all participants – flippers, ibuyers, and realtors/brokerages – are rehabbing, improving, decorating, and staging most homes for sale. The movement has been building for years, and in 2020 we should see full implementation.
It takes some of the sting out of paying full retail, and buyers really don’t mind paying all the money if they get a turn-key home. Because sellers and agents will be going further to satisfy the retail buyer, we should see more of the softer landing that we saw this year that was caused by dropping rates.
Here’s what Rob Dawg said last year:
Here goes.
Median +4%. Late year inflation and demand for even negative cash flow rental properties. Volume down only 12%. Lots of deck chair shuffling will look like volume. Reported volume -10% from 2018.
$2m+ volume will increase. Lots of quality properties aging out and none of the kids or grandkids can afford to take possession out of the communal estate. Add to this the “too many houses” crowd both casual investors and the very rich who have made their money and ready to throw off the carrying costs.
Almost nothing sub $550k will show up on the sales sheets.
Interest rates will range between 4.4% (early, briefly) and eventually 5.6% (in Q4). Inflation and banking regulations conspire.
There may be a technical recession that will be over before it is confirmed. People will argue whether there was a recession.
Here is a metric we haven’t followed. Total dollar volume of sales will be flat to slightly down.
But what do I know?
We both thoughts rates would be a problem in 2019, but what do we know? It’s hard to believe rates could drop lower in 2020, but if they did get into the low-3s it would ignite the market. Those who have been wanting to move up or down but had a mortgage rate in the mid-3s or higher could now justify moving and getting a lower rate. If California residents pass the referendum to enable seniors to take their old tax basis with them when they buy up in price, it could also ignite sales (if you believe the California Association of Realtors).
What’s Your Guess? The closest guesser will get four tickets to a Padres game!
Mr. and Mrs. Dawg did join us for a Padres game this year (vs. the Red Sox).
Ok, ok – more?
Let’s lay some odds.
75% chance that 2020 looks like 2019 & 2018
25% all hell breaks loose
I am a notoriously slow starter, and there have been years when I didn’t sniff a deal until February. It’s way different this year – we’re already in the running for 4-5 listings for 1Q20. It may not mean much because it could just be my lucky year. But I’ve never had this many future-listing possibilities in Nov/Dec.
Indeed. The Klinges are consummate hosts. Great company. Great seats. Great box. Disappointing outcome (wink). The Sox dropped the third of three after winning the first two. The entire season disappointed us all. On to the housing markets.
Plural. Markets. Gone are the spectra from entry to luxury. Small to estate. Rehab to turnkey. Likewise the “help” is no longer a smooth continuous curve of service and expectations or price.
That said it will not be a “prediction” but “predictions.”
I just got back from Las Vegas where the lost decade has been erased from collective memory. The Strip is building again. The exurbs are stable and substantially recovered. It will affect my predictions for 2020 much as it did for c. 2007.
And part of my predictions is noting that JtR sniffed out the sea change and aligned with Compass. I have no interest or professional relationship with either but I see the wisdom.
Actual for the record predictions after I recover. Hawaii, Seattle, Vegas within 6 weeks plus the half dozen other excursions this year. Give me a bit.
Likewise the “help” is no longer a smooth continuous curve of service and expectations or price.
Will consumers figure it out in time?
When the market gets jiggly a mistake could cost more than a couple of points….and roughly half of the realtors have never seen a soft market.
Indeed. The Klinges are consummate hosts.
You are too kind, but I did keep you out of jail! We tore up the Gaslamp, didn’t we? Shots, brawls, scooters – man, they will never forget us. 🙂 🙂
> Shots, brawls, scooters – man, they will never forget us.
If you hadn’t of called that biker gang’s rides “scooters” we could have avoided that high speed chase. Good thing you had pics of your truck mods and I my GS1110ES.
My biggest unknown for 2020 is the political groundswell on the local level that after stripping the doublespeak becomes “houses cost too much and we will try to fix it.”
LOL!
One easy and simple idea for government to make housing a little cheaper:
When you buy a house, you can assume the previous property-tax basis for 5 years, then after that the regular 1.1% applies.