As we enter into the New Year, it’s important for successful home investors to understand your investment properties outlook for 2020 and beyond. Currently, the prices of single-family homes in high-population areas like San Fransisco and Seattle have almost doubled since the bottom of the cycle in 2011. According to Zillow the median home in San Francisco is almost $1.4 million. But the median household income is only $96,265. Can this be sustainable? Perhaps this is part of the reason for the high levels of homelessness in the region.
New Jobs Boost Housing Demand
On the other end of the country, Zillow ranks the West Palm Beach Florida real estate market as “Very Hot” with the median home price at only $250,768. Currently, there is a boom in country club properties for sale in the area which could put upward pressure on the median price.
With Unemployment at record lows, more people can afford their own homes so the demand for single-family homes should be growing. According to Forbes, “demand for housing in big markets almost certainly will continue to grow faster than builders can create more supply.”
Lower Mortgage Rates
30 year fixed rate mortgages peaked at just under 5% in late 2018 and fell through most of 2019 bottoming at around 3.5%. From there they rose to 3.8% before beginning to fall again. Realtor.com is projecting mortgage rates to average 3.85% throughout 2020 considerably below the rates of 2018 and most of 2019. Lower rates could continue to spur housing demand.
Click Chart for Larger Image
Chart Citation:
Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US created January 24, 2020.
Hottest Housing Markets
According to MarketWatch the Hottest Housing Markets in 2020 are Far from the Coasts. With the number 1 market in… believe it or not… Boise, Idaho! Home prices in the state capital have risen 11.1% over the last year. McAllen, Texas, ranked No. 2 with a median home price of $152,000. Three of the top 25 were in Tennessee and three in Florida.
|
2020 Rank |
Metropolitan area |
Median Sales Price |
Projected Sales Growth |
Projected |
| 1 | Boise, Idaho | $295,000 | 0.3% | 8.1% |
| 2 | McAllen-Edinburg-Mission, Texas | $152,000 | 4.4% | 4.0% |
| 3 | Tucson, Ariz. | $230,000 | 3.4% | 3.3% |
| 4 | Chattanooga, Tenn. | $189,000 | 2.0% | 3.6% |
| 5 | Columbia, S.C. | $178,000 | 5.5% | -0.2% |
| 6 | Rochester, N.Y. | $149,000 | 4.7% | 0.4% |
| 7 | Colorado Springs, Colo. | $312,000 | -1.4% | 6.3% |
| 8 | Winston-Salem, N.C. | $169,000 | 3.6% | 0.5% |
| 9 | Charleston-North Charleston, S.C. | $270,000 | 1.2% | 1.9% |
| 10 | Memphis, Tenn. | $188,000 | 0.1% | 3.0% |
| 11 | Salt Lake City, Utah | $338,000 | -0.5% | 3.5% |
| 12 | Phoenix-Mesa-Scottsdale, Ariz. | $274,000 | -0.4% | 3.4% |
| 13 | Knoxville, Tenn. | $189,000 | 1.6% | 1.3% |
| 14 | Cleveland, Ohio | $154,000 | 2.6% | 0.4% |
| 15 | Spokane-Spokane Valley, Wash. | $252,000 | 1.5% | 1.3% |
| 16 | Orlando-Kissimmee-Sanford, Fla. | $255,000 | 0.9% | 1.8% |
| 17 | Allentown-Bethlehem-Easton, Pa. | $195,000 | 2.3% | 0.4% |
| 18 | Honolulu, Hawaii | $583,000 | NA | NA |
| 19 | Akron, Ohio | $151,000 | 2.6% | 0.0% |
| 20 | New Haven-Milford, Conn. | $220,000 | 5.0% | -2.4% |
| 21 | Portland-South Portland, Maine | $295,000 | 1.4% | 1.2% |
| 22 | Cape Coral-Fort Myers, Fla. | $236,000 | 0.0% | 2.6% |
| 23 | Raleigh, N.C. | $294,000 | 0.2% | 2.2% |
| 24 | Seattle-Tacoma-Bellevue, Wash. | $478,000 | -0.8% | 3.1% |
| 25 | Tampa-St. Petersburg-Clearwater, Fla. | $219,000 | 0.6% | 1.6% |
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About the Author:
Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan
