2019 has been interesting and it’s hard to believe it’s already over, but it’s time for us to pull the cover off our crystal ball and share with you what we see coming in 2020. We do that today with my TOP TEN Real Estate Investing predictions for 2020. 

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News:

Another City Is Paying Newcomers to Move There

https://magazine.realtor/daily-news/2019/12/17/another-city-is-paying-newcomers-to-move-there

Residential Construction To ‘Increase Substantially’ Come 2020

https://www.forbes.com/sites/alyyale/2019/12/18/residential-construction-to-increase-substantially-come-2020/#3fc0dc7f41ff 

 in 2020

https://www.nreionline.com/hotel/hotel-sector-looks-poised-another-strong-performance-2020

These Markets Will Be the Best Bets for Multifamily Investments in 2020

https://www.nreionline.com/multifamily/these-markets-will-be-best-bets-multifamily-investments-2020

The Nine Most Resilient U.S. Office Markets

https://www.nreionline.com/office/nine-most-resilient-us-office-markets

Topic: The Prediction Show!

Recap: The Big Stories of 2019

1. SALT deduction above 10k affects sales of expensive properties
2. Luxury market already losing speed - getting back to normal.
3. Sub-luxury still hot. Lack of inventory, strong resales. 
4. Chronic shortage of new housing starts, especially in starter home category.
5. iBuyers make a splash.
6. Class-Action Suit against the NAR. (the story that wasn’t. Almost no impact in brokers’ daily lives)
7. Rent controls. Oregon and California. U.S. next?
8. House Flipping at an all time high in 2018 (10% of all homes sold). Back down to around 5% in 2019. House Flipping profits are at a 10 year low.
9. Zillow is about to become the Google of real estate. If they ever turn an actual profit, watch out!
10. Smart home technology comes of age.

2020 Predictions

1. Housing inventory shortage will continue, particularly in starter home class. 
2. 1. Hopeful signs: New home permits up in the 4th quarter 2019.
3. Millennials and now older Gen Z’s will buy homes, keeping housing market stable
4. Coastal markets will see flattening of prices, reductions in LA, San Fran, Seattle, NYC, Miami, Boston
   1. Wholesaling in Illinois. Jan 1, wholesalers must be licensed realtors. 
   2. Rent controls
   3. Forced shelter for homeless in new construction - Portland. 
5. Looming government interference
   1. Oregon and California, now New York
   2. Illinois
   3. Nationwide?
6. Interest rates to remain low, may see all-time low mortgage rates.
   1. Lending guidelines remain tight
   2. Default and foreclosure rates remain at all-time low rates. 
   3. Low inventory gives no incentives to loosen lending guidelines. 
7. No housing crisis in the next six months. Low probability of housing crisis in the next two years. 
   1. Exceptional markets down - aformentioned coastal areas plus Chicago, St. Louis and Kansas City. down 1-3%. 
   2. Exceptional markets up - 3.5-4% gains
8. Nationwide, prices will tend toward on pace with inflation - 2.8-3.2%
   1. Billings and Missoula, MT, 
   2. Sioux Falls and Rapid City, 
   3. SD Tampa, FL, 
   4. Memphis, 
   5. Raleigh-Durham, NC, 
   6. Mobile, AL, 
   7. Huntsville, AL, 
   8. Columbus, GA
   9. Chattanooga, TN
   10. Tuscon, AZ
   1. Lower profits
   2. Weeding out process - many will leave the business altogether. 
9. House flipping markets will become more efficient in major cities. 
   1. AirBnB
   2. Self-Storage
   3. Seller Financing Inexpensive Houses
10. Alternative small investor strategies will catch fire in 2020.
11. Overall Housing market will resume its rightful position in the economy - a relatively minor player. 
12. Retail brick and mortar will struggle. Increased vacancies and store closures.
13. iBuyers will all raise new money and increase areas of operations. None will turn a profit. 
14. If Trump is re-elected, Fannie Mae and Freddie Mac will announce plans to go private with an IPO in 2021.
15. Private solutions for affordable housing will begin to make headlines. According to the Economic Innovation Group (EIG), "as of October 2, 2019, 115 listed funds have identified affordable and workforce housing, as well as community revitalization, among their investment priorities—a nearly four-fold increase since the beginning of 2019." Most of these developments are focused on providing affordable housing for wage earners who make around 40% to 70% of the area median income.
16. Opportunity Zone investments will lessen in 2020, but it won’t be over. the best OZ deals may be found in 2020.

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Motivational Thoughts for the day

 

• "Often out of periods of losing come the greatest strivings toward a new winning streak." - Mr. Rogers