Real estate predictions for 2020 are looking pretty positive: interest rates sit at historic lows, prices are strong but stable, and demand is high. But there is one challenge to this optimistic outlook, and it’s a shortage of housing inventory.
Housing Inventory Is Shrinking
Inventory—the number of homes for sale, that is—isn’t just low. It’s actually shrinking. A recent report by Move.com shows that 2020 began with the lowest number of homes for sale in two years, thanks to the market’s largest year-over-year inventory decline in almost three years.
The US is now at its lowest inventory level since January 2018. But… what, exactly, does that mean for you?
For Buyers: Patience & preparation are essential.
For a buyer, a decline in inventory isn’t really in your favor, though it certainly doesn’t mean that you can’t find a good home. You just might need to have a bit more patience and be ready to move forward quickly. Reduced inventory means a more competitive market, so getting preapproved is absolutely essential if you want to be able to make a competitive offer.
The good news is that once you buy a home, you’ll start building instant equity on it, thanks to the rising demand.
For Sellers: You’re in the driver’s seat.
A shortage of homes, plus increased buyer demand, definitely puts sellers in an advantageous position when it comes to negotiations. However, it’s important to understand that having the upper hand doesn’t mean you can start making unreasonable demands.
Why Is Inventory So Low, Anyway?
Why the plummeting numbers? The main reason is that many millennials are reaching an age, and a place in life, where they’re ready to enter the housing market. In fact, close to 4.8 million millennials will reach the age of 30 this year! And at the same time, older generations are choosing to remain in their homes for longer periods of time, rather than sell and downsize or relocate.
The Bottom Line
Despite the low number of homes for sale, the real estate outlook for 2020 is very optimistic. And whether you’re buying or selling, being prepared and knowing what to expect is essential to finding success in your endeavors.
Another big key to success? Finding a fantastic local real estate team to represent you! Here are Linda Craft & Team, REALTORS®, we have over 350 years combined experience, and we’ll put every minute of it to work for you! Contact us to learn more about what we can do for you.