Many experts have provided some predictions for the real estate market in the latter half of 2020. What kind of predictions those experts could have given out? Hopefully. most of them are of the positive one and not of the negative ones, since we clearly had too much negativity this year.
Real Estate Market Predictions To Take Note Of
According to Forbes, listed below are some of the notable real estate market predictions that were given to them by experts in the field of the real estate market:
- Robust housing demand will still pertain to 2020. They expect that millennials and baby boomers, once working adults with their own finances, will be the ones who will support the real estate market with their upcoming demands.
- In 2019, housing prices will surface back. Thanks to the possible demand that the first prediction will have, and due to many real estate properties being available, the prices for most will be lower down to the previous year's prices.
- Continuation of refinancing demand. This kind of demand will be pushed through even further this year due to the effects of digital and cashless payments most are using today, wherein the real estate market is no exemption.
- Foreclosures, short sales, and bank-owned properties will increase. Due to the expected increase of delinquent mortgages, this prediction is most likely to happen in the latter half of 2020.
- Purchases of home properties will depend on remote work. People will be looking for real estate properties to work remotely to avoid being exposed to the current pandemic.
- Human interaction will be limited due to mass technology. Due to the effects of COVID-19, the development and mass application of technologies that can make most things digital (i.e. less to no human contact) are being rapidly applied to most communities around the world.
- Sale tours are done virtually while being guided by a human. Due to the ever-increasing digital demand and service, many companies, groups, and organizations have started to adopt this kind of new consumer behavior, with a human guide throughout the online tour.
- Reallocation of real estate classes' capital would highly likely be a reallocation of capital assets for most real estate classes, mostly in multifamily and industrial assets.
- Equity fund offerings will be more preferred. Most would prefer choosing equity fund offerings during this pandemic, among others, thanks to its high potential income while having a lower risk overall.
- Multifamily properties that are under Class B will be stable. Properties under this category will most likely survive through the weakened economy due to the pandemic's effects, while others won't.
- Properties will be sold at a lower price. Most sellers would most likely lower their stuff to get possible buyers since most people won't have enough cash to spend on.
- Commercial properties would be less in demand. This will likely happen due to the buying public looking for more residential properties instead of commercial ones.
- With the continuous rise of the industrial warehousing market, many remaining commercial businesses will likely increase this demand. They will need to get their source of goods and products faster and cheaper than before.
- The suburban or rural living will be on the rise. Since most people would like to avoid being in crowded places due to the pandemic's threat, many will choose to live in suburban or rural areas instead.
- Fitness amenities included with homes will be on-demand. Many people are still locked within their homes to avoid getting the virus. Therefore, many would like to have fitness equipment in their homes to stay as fit as possible.
Other Predictions for the Real Estate Market
Aside from that list of predictions from one source, others have their own predictions for the real estate market in the second half of 2020.
According to Cision PR Newswire, experts believe that the current strong home prices will continue to the next year of 2021. However, it can be hindered by the current uncertainty of today's world's economy, wherein it might continue up to next year as well.
Additionally, some experts say otherwise of the current real estate market in the second half of 2020, according to the balance. They have provided five reasons as to why there could be a market crash in the second half of 2020, which are listed below:
- Higher interest rates.
- Risky financial products.
- Trump's tax reform plan.
- Rising sea levels.
- The yield curve of US Treasury notes becomes inverted.
