{December 2019} 2020 Real Estate Predictions

Similar to 2018, 2019 was another tough year for brokers with lower transaction volumes.  With many buyers continuing to play safe with low offers, it was hard to bring together buyers and sellers.   What will 2020 bring?  Here is a brief summary from the 2020 predictions from StreetEasy, Bisnow New York and Brick Underground, along with my thoughts: 

• Rents will increase in the new year.  As more buyers stay in the rental market, there is heightened competition for rental units.  Especially in high-end amenity-rich buildings.  I am seeing good demand for luxury rentals in prime neighborhoods.  This means people who could afford to buy are waiting still

• Buyers continue to have power.  We see more buyers pulling the trigger in late 2019, but many more are waiting, unsure if prices will continue to drop.  I come fresh off a bidding war with 4 other bidders.  This would have gotten a dozen bidders back in 2017.  We won with a narrow cover, which was another indicator for a bidding war in a buyer’s market.  Many in the industry believe prices have stabilized but the broader uncertainties will put a cap on the speed of price recovery

• The geopolitical uncertainty with the elections and protests around the world creates uncertainty that holds off major capital decisions but in history these events alone do not have strong impact

• Interest rates will stay low.  New development market continues to struggle.  This could create a good opportunity if developers feel the pinch from their lenders and start to offer good deals

Happy New Year!  May you leave the past with gratitude and embrace the unknown with open hearts.