2020: 5 considerations that can affect real estate

Why does the price of real estate change, by various amounts, over different time periods, etc.? Those who look at this, from a historical perspective, realize that the only thing predictable is that it is a challenge to know, in advance, what will occur, in the near future and beyond! In recent years, the cost of houses, in many areas, has increased, for a variety of reasons. Some of these include: historically low interest rates (which has brought very low mortgage rates); seven consecutive years of a quality economy; consumer confidence; a sense of security at work; etc. At the same time, some factors present challenges, such as: the current high level of house prices; politics; Tax laws; and forecast future economic conditions, etc. With that in mind, this article will briefly attempt to consider, examine, review, and discuss 5 considerations that may affect the real estate market in 2020.

one. General economic conditions: Will the economy remain strong or will we see certain warning signs of a possible recession or slowdown? What will be the public perception, etc.? Will the labor market be strong and will it result, in the future, in a greater participation in the so-called American Dream, of having a home of your own? What will the cost of rents be for people looking to buy homes? Will all segments of the housing market get stronger, weaker, or stay the same? Will the top end be stronger or weaker than the bottom end or the mid market?

two. Interest rates: We have seen very low mortgage rates for a number of years, so will this trend continue, or will these rates start to rise? Since low mortgage rates mean you can buy more home for your dollars, if they rise, what effect will this have on home prices?

3. Impacts of Tax Laws: Tax reform legislation, passed in 2017, brought a cap on state and local taxes, or SALT, that are deductible for income tax purposes. In states where there may be an impact, high-end real estate may be negatively affected.

Four. Consumer Confidence: The higher the consumer confidence, the stronger the real estate market will be! When people believe everything will be okay, they are more willing to commit to significant investments, and for most Americans, the value of their home represents their single largest financial investment.

5. House prices: How high can house prices go before there can be any short-term correction?

Be a wise consumer and know, as much as possible, about the real estate market and its possibilities! Are you up to this task?