Get ready for another competitive year in 2020, but expect it to be somewhat different than the past few. Sales prices will remain high, though they may come down just off peak of Spring 2019. There will still be competitive bids on most homes, but we expect the trend towards the number of offers to be lower AND that the final sales prices will flatten out in terms of year over year increases. Meaning most homes won't drive higher than we saw in 2019, but they certainly won't tank either. List prices will likely soften a little to reflect the fact that buyers have been nervous about whether we might see a decline in value as soon as they purchase, but in the end, the market will still seek it's own level. Best school districts and commute locations and upgrades will continue to be fierce. Lower list prices in the Spring over last fall (not by much, but softened) will invite more buyers to participate, as in years past, but this year it will be devised to signal to buyers that their concerns are being reflected by the market.
I expect the Spring market to have a lot more inventory and it will taper off again by Summer and Fall. Spring market will set the values for the rest of the year as it always does, and list prices in the second half of the year will then adjust upwards, if the number of offers remain low. Pricing strategies will still be price lower and let overbidding define the final price on each property.
The fall market will be affected by the election, as happens every cycle. Given the national psychology of this election year, I expect a wonky & nervous Fall. Sellers with less equity might be wise to try to sell earlier in the year. Sellers with many years of equity will have more breathing room and less competition in the fall, and will be fine early or late, but their pricing strategy may need to adjust as the year progresses. Interest rates will still be remarkably low early in the year, but if they begin to move, some buyers will find they have less buying power. Rising interest rates usually spur buyers who have been sitting on the fence, and competition rises.
Competition in the best school districts will still be tough, as buyers factor their budgets for home vs. private school. The outer edges of the East Bay will soften somewhat over the next year and this will create opportunities for more first time home buyers to capture a home.
Buyers in today's dollars will remain pickier about what they get for their money, with the most cosmetically updated homes capturing the most attention. It will matter more than ever WHERE the money is spent for prepping for sale. Sellers are advised to budget carefully and maintain control of where the money goes and to align with experienced agents who won't make silly decisions. Avoiding liens for design work is important, especially if the market takes a downward turn. Design trends are moving a bit and there is alot to know about which trends will create the best return. And which give the best long term legs to your home. Nuances will matter more this year than ever before and getting it just right will require an agency relationship built on getting your custom results and not a volume turnover of homes. Call for more details, if you have any questions.
Overall, the real estate market is going to stay strong for 2020.
