News about the economy has moved from concern over the health of the market in 2020 to optimism. Economists point to job growth, low unemployment and a good real estate market - for now. An undercurrent of concern that another recession is imminent, however, may be keeping consumer confidence low, and as a result, the National Association of REALTORS® (NAR) conducted its first-ever Real Estate Forecast Summit in December, featuring the insights and market forecasts of 16 economists.
While all the Economists had varying opinions about the state of the market, and where we are headed, the biggest takeaway is that chances of another recession in the short-term are low, tallied at an average 29% chance by the economists. Here’s what the economists had to say:
Current Market Analysis:
“We are in a great economy,” said Lawrence Yun, PhD, NAR’s chief economist, “there is consistent job creation, leading to a super low unemployment rate of 3.6% in the U.S. The stock market is touching an all-time high, and homeowners have been accumulating wealth thanks to price appreciation.
“But there are segments of the population that are not participating in this wealth gain. We have more people, affordability conditions are better, yet home sales are actually lower, so something is not matching up with the current environment.”
- Mortgage rates will rise incrementally, possibly hitting 4% in 2021—still favorable according to historical conditions.
- Slight weakening in home sales, similar to 2019, driven more by lack of supply than lack of demand.
- Slower price appreciation that is more manageable and more closely in line with income growth.
- 60,000 more housing starts in 2021.
- Rents expected to rise a little faster than home prices.
Those economists who were less optimistic felt that if we did go into a recession, it would be a much shallower recession. Overall, predictions for the future were relatively optimistic, with concerns over a recession low—a one in three chance.
Here’s our takeaway for North Fork homeowners and buyers. If you are planning to sell, get into the market early - don’t wait for Spring. If you are planning to buy a home on the North Fork, buy sooner rather than later – prices will continue to go up and mortgage rates will increase. Call us now to list your home or buy a home. We’re available - no winter in Florida for us, we’re here on the North Fork to serve you!
Source: NAR Forecast Summit: Is a Recession Imminent? Industry Economists Share Predictions, Liz Domingues, Associate Content Editor, RISMedia, December 25, 2019.