Will 2020 favor buyers or sellers? What will be the biggest barrier to homeownership this year? What can agents do to prepare first time buyers? We asked over 400 real estate agents across the country what they think will happen this year. Do their predictions match what’s happening in your local area? Let us know in the comments below!
Will low inventory be a problem for buyers in 2020?
An overwhelming percentage of agents (71%) agree that low inventory will continue to cause a challenge for buyers in 2020. Ensure your clients have access to regularly updated search results and automated email alerts so that they know as soon as a listing that meets their criteria hits the market.
Will 2020 favor buyers or sellers?
With low inventory creating a concern for buyers, 46% of agents believe that 2020 will favor sellers. 28% believe it will be a balanced market and 26% believe buyers will come out ahead this year. Finding ways to help your buyers will be critical in 2020. Familiarize yourself with first time buyer programs to help buyers pay for closing costs and explain the benefits of renovation loans that can help them afford repairs and upgrades on homes in their price range.
Will home prices rise or fall in 2020?
Most agents (53%) agree that home prices will rise in 2020, with a large percent also suggesting that home prices will stay the same (31%). With a continuing trend of low inventory, only 16% of agents believe home prices will fall. Rising home prices, while making it more difficult for buyers to enter the market, are a good sign for sellers. Focus on helping buyers and future buyers raise their credit scores this year so they can qualify for a mortgage.
What will mortgage rates look like in 2020?
Mortgage rates have fallen dramatically since the 2008 recession. Now, 74% of agents predict mortgage rates will stay about the same in 2020, meaning home buyers will continue to reap the benefits of low mortgage rates for at least another year. Low mortgage rates can also help buyers get into a better home, especially when fewer options due to low inventory might be prevalent in your market. Help your buyers get the best rate by encouraging them to save more for their down payment and clean up their credit score.
What will be the biggest barrier to homeownership in 2020? How can agents help buyers overcome that barrier?
According to our poll, the largest barriers to homeownership in 2020 will be low inventory, affordability, lack of savings, qualifying for a mortgage, debt, and fear.
- Low Inventory – More than a quarter of the agents surveyed cited low inventory as the biggest barrier to homeownership in 2020. According to Kansas real estate agent Susan Parker-Bonham, “Agents can help buyers overcome these issues by working harder to get more homes listed and to educate buyers on how to improve their credit scores. This effort will ultimately assist buyers in qualifying for the funds they need to purchase homes.”
- Affordability – Affordable housing was often cited alongside low inventory as a barrier to homeownership this year. “The best thing agents can do to help buyers get their offers accepted is to learn contract writing strategies and creative ways to write them so that their buyer will stick out over others who just write normal ‘samo samo’ offers. You have to be aggressive, organized and ready to go!” says California agent Ginny Ritz.
- Savings – Buyers not having enough cash to cover their down payment and closing costs will also be a problem in 2020. With a market that’s likely to favor sellers, buyers who want to win bidding wars won’t be able to rely on seller concessions to get to the closing table. North Dakota real estate agent Mary Splichal suggests that “Agents can help buyers by introducing them to a lender that is familiar with state programs that assist buyers with down payment and closing costs.”
- Qualifying/Credit – Agents also predict buyers will have trouble qualifying for loans, especially due to low credit scores. Laura Corbett in Ohio says that you should focus on “Overcoming all the obstacles! As an agent, advise your clients to take one step at a time. The deal is never done until the closing! Take nothing for granted.”
- Student Loans/Debt – Debt to income ratios could also prove problematic for buyers in 2020, especially as a result of student loans. According to real estate agent Jenny Gibson of Louisiana, student loans “will continue to be the disqualification of so many potential homeowners. We as agents can start having more conversations with buyers through videos on social media and face-to-face buyer consultations 3-6 months prior to them wanting to make the purchase. Education is everything!!”
- Fear – Many agents also cited buyers could be afraid to make big purchases in 2020 due to fear of an economic crash or changes resulting from the upcoming election. Sean Preston of Massachusetts suggests that “Strong market knowledge, early planning, and experienced representation will help buyers be successful in 2020.”
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