IS IT THE RIGHT TIME TO BUY A HOUSE IN THE UNITED STATES?

 IS IT THE RIGHT TIME TO BUY A HOUSE IN THE UNITED STATES?

Is it the right time to buy a house in the United States?

A new year is upon us, and it's already time for investors to look for promising markets. The United States has a strong economy, low unemployment, and a booming real estate market for years. What about 2020? Is it a good time to buy a home in the United States?

buy house in the USA 2020

A real estate market still on the rise in 2020?

Real Estate Market Forecast

In its 2019 Housing Market Forecast, the National Association of Realtors predicted that the national median price of existing homes would increase to approximately $266,800 in 2019 (up 3.1% from 2018). In 2020, NAR predicts a further increase to approximately $274,000. According to Zillow's survey, experts predict that home prices will increase by 2.8% nationwide in 2020. This tells us that prices will increase, but at a slower pace than in previous years.

As for property appreciation rates, experts have similar predictions. According to the latest report from Veros Real Estate Solutions, housing market data shows that the average expected residential real estate appreciation rate in the 100 largest markets in the United States will be 3.7% over the next year. This maintains the rate forecast for 2019. Of course, these housing market forecasts and trends vary by region, as housing demand and supply are key discriminating factors between markets. Some markets may experience significant gains, while others could see relatively small gains. For example, the Midwestern states of Indiana, Michigan, and Ohio are showing strength, with average statewide real estate appreciation for all three expected to hover around 5%, according to Veros. Texas, however, is expected to continue to slow, with major markets like Dallas and Houston projecting appreciation of only 2% to 3%.

Should we expect a recession?

We all know that many real estate markets in the United States were hit hard during the Great Recession. Now, there is speculation that there could be another economic recession and a housing market collapse in 2020. In its quarterly home price survey, Zillow asked experts and economists to give their predictions for the US housing market in 2020 and their expectations for the next recession. Less than half (48%) said they expect the next recession to occur in 2020. Respondents were also asked to choose and rank up to 3 likely triggers for the next recession. The results show that trade policy, stock market correction, or a geopolitical crisis are more likely to trigger the next recession than a stock market crash. Moreover, experts say that even if there is a recession around the corner, the US real estate market is much healthier and we won't see the same impact.

Read also: US Real Estate, MLS vs. Off-Market

Where to buy a house in the United States?

Even though the American real estate market in 2020 is promising, there are some cities that are best avoided. Indeed, some major cities have seen their prices soar in recent years. This is the case in Miami, San Francisco, and Chicago. This price increase is even forcing residents to move to the suburbs in order to find affordable housing.

Fortunately, other cities offer affordable properties and even attractive returns. This is the case on the west coast of Florida, with cities like Port Charlotte, which are increasingly developing. It is possible to buy a house overlooking the canal and easily rent it out, whether for vacations or to local residents. Further north and close to the Canadian border, the state of Ohio also offers great opportunities. Cities like Cleveland are booming. House prices are affordable (between $55,000 and $80,000) and the returns are excellent for investors.

Overall, for buyers, 2020 appears to be shaping up to be a good time to enter the real estate market with no signs of imbalance.