Home buyers who exercise patience over the next couple years may be handsomely rewarded.
In a survey of 100 real-estate economists and experts conducted by real-estate website Zillow ZG, +1.56% and research firm Pulsenomics, a 43% plurality said that they believe the U.S. housing market will become a buyer’s market in 2020.
By then, the number of homes available for sale could finally outpace demand, allowing home buyers the chance to negotiate a lower and more affordable price on a property. The researchers didn’t give estimates on what kind of discounts buyers could expect.
They did, however, say that some markets will see the tide change sooner than others. The panel of expected predicted that the Midwest will be first to experience the shift into a buyer’s market as early as 2019, followed by the rest of the country in 2020.
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It’s the latest indication that experts in the real-estate industry are starting to grow bearish on housing. Back in May, a separate Zillow and Pulsenomics survey found that more than half of economists polled believed the U.S. economy would fall into a recession sometime in 2020.
Recent data have shown signs of trouble in the housing market. Although home prices are still rising at a faster pace in 2018 than the year before, the rate of price appreciation in some of the country’s hottest housing markets has slowed considerably.
Additionally, more home sellers are having to cut their listing prices. At the same time, mortgage rates have fallen in recent weeks as more buyers choose to stay on the sidelines because of the high cost of buying a home.
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But those selling their homes now need not worry too much. While the future isn’t looking swell, the historically low inventory of homes for sale should help owners get the price they want when they take their property to market.
“Conditions are starting to show signs of easing up, but the effects of years of limited construction still linger,” said Zillow senior economist Aaron Terrazas. “Inventory is still falling on an annual basis, and home values are growing well above their historic pace.”
He says those selling their homes still have the edge in most markets in 2018. “Although these trends are starting to lose their edge, it is far too soon to call it a buyer’s market,” Terrazas added.
