Fall is the new spring… at least for real estate. The coronavirus pandemic has changed the way we live and has introduced what everyone is now calling “the new normal.” And it seems like the new normal (for this year at least) is an active fall real estate market. Fall usually sees the beginning of the slow down for real estate markets nationwide, as markets are usually hottest during the spring and summer months. But this year has been different.
As we venture into the fall months, it’s important to understand what trends will look like for the fall real estate market 2020. So what will the year’s last quarter hold for the fall housing market? Join us as we delve in.
Related: Coronavirus Real Estate Market Updates
What Are the Predictions for the Fall Real Estate Market 2020?
And what trends will dominate in the upcoming months?
While it’s been challenging to make precise predictions this year, we’re already seeing clear trends for the fall real estate market. Generally speaking, the US real estate market has improved in the last couple of months, allowing us to begin this article on a hopeful note. So let’s take a look at some of the predicted fall real estate market trends:
Home sales are expected to go up
One expected fall real estate market trend is a rise in home sales.
Home sales went up at the end of the summer real estate market and are expected to continue to do so in the fall real estate market. The demand for homes has been driven by two main factors: (low) record-breaking investment property mortgage rates and previously ‘restricted’ buyers.
Life came to a halt at the beginning of the pandemic. The spring months especially saw strict lockdowns imposed in attempts to limit the spread of COVID-19. As people have slowly adjusted to our new reality, there’s overdue home buying from previously curbed demand pushed from the spring and summer months.
Mortgage rates on investment property loans, on the other hand, have been hitting one low after the other this year. Current average mortgage rates are at 2.98% for a 30-year fixed-rate mortgage and 2.45% for a 15-year fixed-rate mortgage.
Related: Investment Property Mortgage Rates 2020: COVID-19 Update
Home prices and property values are also expected to rise
Home prices are also expected to rise, though not drastically. With low inventory, properties are spending less average time on the market. Additionally, new listings and houses for sale are down 12%, according to Realtor.com’s recent data. The surge in demand and competition, coupled with low inventory, may continue to slowly drive the prices up for the fall real estate market. The same report by Realtor.com indicated that median listing prices have increased over 2019 numbers. So those concerned about a drastic drop in prices due to coronavirus, worry not.
Welcome to the ‘burbs?
Lockdown measures have forced millions to stay at home, many of whom began to re-examine the spaces they occupy. Initially, analysts estimated that there would be a rise in demand for the suburban real estate market or even a boom. Several studies and surveys indicated that Americans are showing interest in suburban properties and areas, which is understandable. However, no radical shift has been detected in suburban markets just yet. Buyers and renters may indeed begin to search for bigger spaces. Nonetheless, they may not always be able to afford that, especially in more expensive cities.
Therefore, at this time, the search for bigger spaces does not directly translate into an exodus trend from urban areas into the suburbs. This could change in the next few months. So it’s essential to keep an eye on suburban real estate markets, as they could be the next big opportunity for investors.
No, the fall real estate market will not crash
Many investors have been wondering whether the real estate market will crash, or whether we’re heading into another recession. Current trends indicate that we are unlikely to. Contrarily, the market is showing early signs of recovery that will prevail well into 2021. Earlier this year, real estate experts predicted market recovery towards the end of this year and moving forward into next year – something we have already seen transpire in recent months.
Real estate market recovery is being described as “W shaped” by numerous analysts. Demand is already picking up, as reflected in the increased number of home sales, as well as low housing inventory. The initial analysis was that demand was to improve in the summer months and September, a fact confirmed in the past weeks. The market may slow down again, before fully recovering – coming to a full W.
It’s important to note that many pre-pandemic trends and market factors still shadow current trends. Housing supply shortage, lower mortgage rates, and increasing prices were all prominent trends in the past couple of years. One difference is that COVID-19 has exasperated some conditions in many US states and cities.
Related: Will There Be a US Foreclosure Crisis in 2020?
What Are the Predictions Post-Fall and into 2021?
The pandemic will continue to shape the real estate market well into 2021. We’re still unable to accurately predict what the 2021 real estate market will look like, especially with conditions continuing to evolve (and with elections coming up). What we could do, is make educated predictions and decisions based on the data we have today for the fall real estate market. Will we relive our early optimism of 2019? We could hope so, as market recovery is bound to occur, slowly but surely. Until then, we will keep an eye on the latest developments in the market, and so should you!
Finally, if you plan to buy an investment property, make sure to use Mashvisor to conduct real estate market analysis and investment property analysis. Learn which areas are a buyer’s market and which ones are a seller’s market. And while the market can be volatile, we still recommend investing in real estate. Our tools come in handy to learn where the best places to buy rental property are, especially when market conditions are this uncertain. To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.