2020 Housing Market - What the Experts Think and What I Think

Real Estate Agent with Baird & Warner Real Estate



A recent report by RIS Media asks the real estate experts what they think is coming for 2020. While there may be broad and sweeping thoughts on real estate, usually these articles are national in scope. We all know real estate is local, right?


(RIS Media delivers real estate industry news, trends, best practices, events, social media, and technology for agents and their clients.)


Here’s what the experts say and how I interpret it (in red) for the North Shore communities of Winnetka, Wilmette, Kenilworth, Glencoe, Glenview, and Northfield.



Everyone felt it at the start of the year—conditions leveling, the market yin and yanging. About half of Power Brokers sensed it, too—that the current cycle’s ending, and a different dynamic’s emerging.

ME: Without a doubt that happened in the North Shore - but at the start of 2018.



“The housing market is in the midst of a normalization period, one that is characterized by slowing price growth, moderate sales and new supply that is slow to market,” according to Ralph McLaughlin, deputy chief economist and executive of Research and Insights at CoreLogic, a data provider.

ME: Yes, this is true here and has been happening for about two years.



Earlier this month, CoreLogic’s Home Price Index—different from the Case-Shiller report—found overvalued prices in 37 percent of the largest markets in the nation.

ME: Overpricing is an ongoing issue which I’ve written about for years in my blog. The fact that the market is sluggish does not have seem to have an influence on anxious sellers. Sellers that are still “testing the market” will be sorely disappointed and those who are prepared and ready to sell are being realistic and pricing properly (which can mean pricing lower than hoped for.)



“Right now, we’re expecting home price growth to recover somewhat from the 16-month cooling period it just went through and to settle out around 4-5 percent year-over-year by next fall,” McLaughlin says.

ME: The 3rd quarter statistics for 2019 compared to 2018 showed some significant drops in home prices - from 2% to 8%. I would love to see them rebound at the 4-5% rate but can’t make that prediction. North Shore property taxes and older home stock that isn’t popular right now might put a damper on that much of a recovery.


RIS MEDIA (a consensus on mortgage rates)


Then there’s interest rates, which are currently at lows, and aren’t expected to move much in 2020. In a forecast from the ULI, the 10-year Treasury rate—correlated to fixed mortgage rates—rises in 2020 and 2021, but only slightly.

“There’s just no evidence that there’s going to be upward pressure on rates any time soon,” Johnson says. “As long as we have a positive slope to the yield curve, as long as we have a stable economy, I don’t see many interest rate increases.”

Beracha confirms rates “may go half a percent in either direction, but I don’t see them [rising substantially] in the next year,” adding “the [Federal Reserve] decreased interest rates twice in the last couple of months—I don’t think we’re going to see much more of that.”

“Barring a significant, positive development in the U.S.-China trade discussions, Brexit, or other significant current geopolitical dilemma, I imagine that mortgage rates will remain near their current, multi-year lows” in the near term, says Speakman.

 ME: Who am I to argue with that. Mortgage rates have barely budged and it’s the one thing that could help nudge sales next year. 



“The labor market remains in good shape but has recently shown signs of slowing,” says Speakman. “Should job creation slow markedly and/or consumers become bearish on the state of the economy, it’s likely that home-buying would slow.”

ME: this seems obvious and is what makes realtors the most nervous. Real estate is the canary in the coal mine when it comes to downturns. Way back in 2006 I began to see worrying trends in spite of the spiked market. I had no idea what would happen, but looking back, the real estate market was speaking long before it dropped bottom.



“One comforting factor that can neutralize an economic downturn is if home-building activity occurs,” Yun says. “When home-building increases, generally, we don’t have an economic recession.”

ME: Home building in the North Shore is an entirely different beast than in the national view. There are no vast tracts being developed here - rather a single house replacing an older house. The market for new construction homes has not wavered much over the years - they have always been popular.

More recently though, the largest of them have been languishing and even price reductions have not motivated buyers. The bulk of new construction is under $2 million and the average sale price of new construction homes in the past 12 months was $1,800,000. And currently, there are 28 new homes for sale priced between $1,075,000 and $13,750,000.

42 new-construction homes sold in the North Shore during the past 12 months. Their list-to-sell price ratio was 93% and the average market time was 311 days. 



However 2020 shakes out, 63 percent of buyers feel optimistic, according to NAR’s latest quarterly survey. What’s more, 52 percent believe the economy’s on firm footing.

ME - Buyers for North Shore homes are finding ample inventory here. Plus there are those low mortgage rates and down payments. Two good reasons to be optimistic. But higher property taxes is one major damper on sales.



So, will 2020 be a buyer’s market, or a seller’s market?

“I would consider 2020 to be a balanced market,” Beracha says. “Prices remain quite high and inventory is still a bit tight, so buyers can take advantage of lower interest rates and sellers can take advantage of the fact that inventory is still low.”

“We anticipate 2020 to continue to shift away from a seller’s market, especially if GDP slows and inventory ticks up,” McLaughlin says.

“At affordable prices, it will still be a seller’s market, and appreciation will be stronger at the lower price points,” Yun says. “The upper-end price projection—as people digest the deductibility of mortgage interest and state and local taxes, including property taxes—is less optimistic. On the lower end, demand will remain solid, given that we have low rates and job creation is continuing.”

 ME: All three of these commenters refer to low inventory which has been an issue in most parts of the nation for several years. We have been the opposite of that with high inventory in all price ranges and long market times. 

As far as the North Shore, I believe it’s too optimistic to say it could swing to a seller’s market. At best, some areas would begin (and have begun) to experience a more balanced market where both buyer and seller have equal advantage. 

This could come about as inventory shrinks due to sellers delaying  listing their homes for a year or so. Unless a major economic or worldwide event occurs, continuing low interest rates should still lure buyers into the deal. 

2020 on the North Shore will look very similar to 2019. Spring will still be busy and homes priced aggressively to sell will be swapped up.



Posted by

Margaret Goss - Winnetka and North Shore Real Estate Broker
Specializing in homes for sale in Winnetka, Wilmette, Kenilworth, Northfield, Glencoe, Glenview, Northbrook, and Evanston.

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Comments (16)

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Always find it interesting to read your take on your local market, Margaret Goss ... as no cookie-cutter assessments are better than yours, the local professional.  It's fascinating how the Chicagoland area has micro-markets so vastly different in nature and needs.   

With the upcoming year being an election year, I feel we could see almost anything happen.  Hang on to your hat ... it could be an interesting ride!


Nov 14, 2019 07:03 AM
Margaret Goss

Hi Gene - thank you - and yes, next year will be an interesting one for our business!

Nov 15, 2019 08:02 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Margaret,
I love that you interpret the so-called expert opinions for your local market. Every agent should do this! 

Jan 02, 2020 09:21 PM
Margaret Goss

Carol - our market is so different from the "average" market that it makes sense to do. 

Jan 05, 2020 07:55 AM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
The House Kat

I like the way you laid this out - it makes it obvious that any high level market overview is not accurate because real estate is all local. I'm glad Carol Williams included this in her weekly Saturday post!

Jan 04, 2020 06:03 AM
Margaret Goss

Kat - thank you.

Jan 05, 2020 07:55 AM
Kris Collis, Associate Broker
Smart Way America Realty - East Stroudsburg, PA
Professional Results you Expect 570-801-5525

Margaret, a very informative, indepth analysis from several sources.  Local agents know best for their market.  We do not fill our buyer's heads with broad, sweeping generalities. I'm sure buyers and sellers alike will be calling you for more information.

Jan 05, 2020 12:55 AM
Margaret Goss

Kris - thank you and I hope so!

Jan 05, 2020 07:56 AM
AndreaBFerreira CRS - SRS - CLHMS
Keyes Co. - Davie, FL
Miami Dade, Broward and Palm Beach County in FL

Great post, good for your customers to have a wise agent. Congratulations!

Jan 05, 2020 05:36 AM
Margaret Goss

Andrea - thanks for reading!

Jan 05, 2020 07:56 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

2018-2019- the South Bay area SFH price dropped on the average -1%. A few pockets one saw price rose slightly. I just do not see how 2020 will be a slower year. Apple can not find enough workers are now taking adults with high school education coding apps. Americans love gadgets and there is no way Apple will stop hiring. We got Tsla desperately looking for workers. I was contacted for an interview w/o applying.
I do see a potential price correction ~6 months after into a recession. May be a few % price correction in 202?? That recession still sounds distant.

As a realtor, I do notice there are fewer people wanting to move in and slightly more leaving, retiring etc. The rental market is sluggish with multiple of 1,000s new one built. Milpitas, Capital Express, Avenue 1, Morgan Hill, and Gilory. Some is whole block size 5-story high rises are not filled yet. I have one in Los Altos by Foothill that needs to be filled for short term. 10

Jan 05, 2020 07:17 AM
Margaret Goss

Sam - your comment is a perfect example of interpreting the local market! Your market is very different from mine, which are both different than any national overview.

Jan 05, 2020 07:57 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

I did some window shopping in December in the 95111 and 95121 zips. Pickings are slim to none and there is a big list of buyers willing to pay above ask even for houses that need significant work. A lot of the listings are selling proximity to the Google campus as a big plus.
I think the bottom was in Aug/Sept but the last rate cut has brought people back in. I agree with Sam - I don’t see how there can be a slowdown in 2020 at all.

Jan 05, 2020 07:18 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Margaret - expertise matters and local real estate expertise matters most.  When it comes to Chicago's North Shore and Winnetka your voice has a meaning for prospective sellers and buyers in the area.  

Jan 05, 2020 08:50 AM
Margaret Goss

Thanks Michael! 

Jan 06, 2020 01:46 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Margaret:

I love what you did with this and it provides the local outlook from someone who knows the market for buyers and sellers. Obviously there are some unknowns going forward, with it being an election year. It will be interesting for you to track what actually happens in 2020 against these predictions...bet you will be on target!

Enjoy the rest of your weekend!


Jan 05, 2020 01:51 PM
Margaret Goss

Jeff - good idea to track 2020 against both the original report and mine. Oh boy - election year . . .

Jan 06, 2020 01:47 PM
James (Jim) Lawson, DBA
DomainRealty.com LLC - Bonita Springs, FL
Broker Associate, RSPS, BPOR, HI & PE

Hi Margaret. Your points are well taken. I only skim read the market reports. The conclusions from the "global information" in these reports can be quite different than that for a given neighborhood within the overall area considered. When someone asks me how the market is doing I answer by describing two close by communities with significantly different market characteristics. "Wow," is what I often hear back.     

Jan 05, 2020 07:25 PM
Margaret Goss

Jim - I also live in an area where neighboring towns have different stats. People don't always realize that there can be that much of a differential.

Jan 06, 2020 01:48 PM
John Henry, Florida Architect
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Thanks for the excellent report about the market this year, especially in your area.

I think job growth is still strong and obviously some areas show increases higher or lower than others.

I see construction for remodels and new custom homes starting to rebound and so I would say I'm optimistic!!  

Jan 06, 2020 07:50 AM
Margaret Goss

John - I'm glad your area of expertise is rebounding. Florida must have a high number of new construction homes being built.

Jan 06, 2020 01:49 PM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I love the title of this blog andyou did so much research in writing it!  Here in Kansas City metro area, there is a glut of homes priced over $500K and most all new builds are north of that number.  Most buyers, esp first timers, are in a price range much lower than that--and so we have bidding wars as builders don't build in the $200-$300K price range. No land far enough in and they don't make a profit

Jan 08, 2020 09:58 AM
Margaret Goss

Mary - it's the same here, most home prices are above what most home buyers can pay.

Jan 08, 2020 12:26 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

You're absolutely 100% correct about real estate being local, Margaret Goss ... sometimes even "uber"-local.  I see that in the vast Chicagoland area all the time.  What's true in one burb/area, is not true elsewhere.

Right now I think that there's changes taking place for us in the Chicagoland area.  We have lagged behind the nation in the current recovery, sadly.  Time will tell how the changes all play out.  I'm keeping my fingers crossed for 2020. 


Jan 08, 2020 12:09 PM
Margaret Goss

Gene - my fingers are crossed too. I hate to be the bearer of bad news all the time, but I have to be truthful.

Jan 08, 2020 12:33 PM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Everything real estate is the L3 factor because it's the geographic that determines the marketing opportunities along with the demographics of the market, yet, most buyers especially in southern California IMO are not always qualified to close, unlike real estate markets in the central states. So, it depends, doesn't it? 

Jan 08, 2020 10:50 PM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Margaret- I'm so glad that this was featured. And, I love how you inserted your own thoughts in red.  As a consumer reading the post, it let me see that real estate definitely is local. 

Jan 10, 2020 06:50 PM
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Great analysis Margaret! I live in the fastest growing county in NC, and the 4th fastest growing county in the US. Our market is driven by retirees from the North East. Most of the National trends don't apply here. We do need inventory, but we are not starved for it

Jan 12, 2020 07:27 AM

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