Why does the price of real estate change, by various amounts, during different periods of time, etc? Those, who, look at this, from an historical perspective, realize, the one predictable thing, is, it’s challenging to know, in – advance, what will occur, in the near, and more distant, future! The last few years, the cost of houses, in many areas, has risen, 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 feeling of job security; etc. At the same time, some factors, present challenges, such as: the high present level of home prices; politics; tax laws; and forecasting the future economic conditions, etc. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 5 considerations, which may impact the real estate market, in 2020.
1. Overall economic conditions: Will the economy, continue to be strong, or will we witness, certain warning signs, of a potential recession, or slow – down? What will be the public perception, etc? Will the job market be strong, and will it result, in future, greater participation, in the so – called, American Dream, of owning a home, of one’s own? What will the cost of rents, mean, towards, people, seeking to purchase homes? Will all segments of the housing market, strengthen, weaken, or remain, around the same? Will the upper – end, be stronger, or weaker than the lower – end, or middle – market?
2. Interest rates: We have witnessed very low mortgage rates, for several years, now, so, will this trend, continue, or will these rates, begin to creep, upward? Since, low mortgage rates, mean, one can purchase, more house, for his dollars, if these rise, what effect will this produce, towards housing prices?
3. Impacts of tax laws: The tax reform legislation, passed in 2017, brought about, a limit, on the state and local taxes, or SALT, which are deductible, for income tax purposes. In states, where there may be, an impact, higher – end, real estate, may be negatively affected!
4. Consumer confidence: The greater, the consumer confidence, the stronger, the housing market! When people believe, things will be good, they are more willing to commit to significant investments, and for most Americans, the value of their house, represents their single – biggest, financial investment.
5. Home prices: How high, can home prices, rise, before, there may be some, short – term, correction?
Be a wise consumer, and know, as much as possible, about the real estate market, and possibilities! Are you up to this task?
Added: by Utopia Realty