5 Trends That Will Shape the Real Estate Market in 2020
In many ways, the real estate market in 2020 represents the fruition of a lot of trends that have been developing over the past few years.
Things we’ll see in 2020 include a dip in buyer interest in large, expensive metropolitan markets; a swell of seniors; a blossoming smart home industry; and the rise in something called “Hipsturbias.” And, we’re sorry to report, we’ll still be talking about millennials.
Watch out for these 5 trends in the real estate world as 2020 continues.
1. Large, Expensive Markets Will Continue to Lose Their Allure
While in recent years there’s been a renewed interest among buyers in urban downtowns in large, expensive markets, this year buyers will be primarily interested in affordability.
In 2020, many of the approximately 100 largest housing markets by city are in store for lower total home sales or price drops, according to Realtor’s 2020 Housing Market Predictions outlook published at the end of 2019.
In more than 25 percent of the 100 largest metros, including Chicago, Dallas, Las Vegas, Miami, and San Francisco, prices will fall off, according to the report. Realtor says this trend is driven by retiring baby boomers and millennials heading to affordable cities in Arizona, Nevada, and Texas and the ‘burbs.
2. We’ll Still Be Talking About Millennials
Millennials, who have been the center of a lot of polarizing trend pieces in recent years, will still influence the real estate market. As Realtor points out, nearly five million are creeping up on the age of 30 and raring to hightail it out of their small apartment in the city (or their parents’ houses) and hit the real estate market.
Realtor says millennials will take more than half of all mortgages this year, which seems to challenge the stereotype that this generation is debt-burdened and lacking stability.
3. 'Hipsturbias' Will Emerge
Millennials are heading to the suburbs, and they’re bringing their walkable neighborhoods and avocado toasts with them. This trend toward the suburbs has paved the way for the emergence of “Hipsturbias,” according to the Urban Land Institute (ULI) in its 2020 Emerging Trends in Real Estate report.
The term “hipsturbia” was actually coined by the New York Times in 2013 in an article about Brooklyn, but now suburbs are applying the “work/play/stay” model to mixed-use communities to appeal to the influx of young urbanites.
These communities have high Walk Scores, good transit access, and an abundance of retail, restaurants, and shopping. And these communities tend to advertise their cool cred on public transit to lure the millennial crowd.
4. The Senior Population Will Continue to Swell
While we’re talking about generations, the Silver Tsunami is beginning to roll in. The population of Americans 65 and older is increasing, as does the average life expectancy, the ULI report points out. And with scientific advances in medicine, this current crop of seniors is set to remain healthy and active longer.
According to a University of Virginia researcher Hamilton Lombard, more and more of these seniors are choosing active lives in walkable, urban neighborhoods. They could also flock to the aforementioned hipsturbias. Concurrently, due to lower housing costs and taxes, Lombard says an increase among retirees in rural states like North Carolina, Tennessee, and Georgia will continue.
Who also stands to benefit? Active adult communities, which offer walkable amenities and social opportunities for independent seniors.
5. The Smart Home Market Will Blossom
If it seems like Alexa and Siri are household names, you’re not imagining things. A Consumer Technology Association study cited by the Las Vega Review-Journal shows that 83 million U.S. households, or 69 percent, have at least one smart home device. Some 22 million households, or 18 percent, have more than one.
Smart home devices include voice-controlled home hubs that control everything from the thermostat to window blinds, surveillance cameras and other home security items, and even kitchen appliances that connect to the internet.
Besides making things around the house easier, having smart home technology can even make it a stronger sell. The Review-Journal article also cites a Coldwell Banker survey that says 91 percent of brokers and agents say homeowners would benefit with smart home technology in a home, with 82 percent saying the technology played a role in a home sale.
In 2020 the smart home market will continue to flourish, and the smart home devices will get smarter. A Forbes article predicts innovations like home security systems that use facial recognition, refrigerators that know when you’re out of food and then do the ordering for you, and robots that take over household chores will become popular.