It is important to note what 2019 brought to the table in terms of real estate and architecture, and the upcoming trends in 2020.
U.S.-China Trade War
As intense the U.S.-China trade war got, so did economic recession. However, a consensus explained that there will not be a likelihood of a recession as the U.S. economy will continue to grow in 2020 with an increase in the real estate prices.
Gap between the White and Black Homeownership
Throughout 2019, homeownership gap between the white and black grew immensely. White Americans owned comparatively more homes than the black Americans, with the percentage of around 73% for white and 40% for black Americans.
Expansion of iBuyer field
iBuyer refers to the real estate companies that make offers to home sellers instantly with the help of technology and purchase houses through cash offers. Although these instant buyers are operating in limited markets, they are expanding each day and reaching new places. iBuyers make certain changes to the house and then resell it to homebuyers, charging a relatively higher fee than a seller’s agent. Increase in taxes also affected luxury sales massively.
Efforts for Safe School Architecture & Climate Change
Repeated school shootings paved way for a design centered approach for the sole purpose of making schools safer for children.
Furthermore, architects involved in acting against climate change. As buildings are one the largest contributors to greenhouse gases, focus needs to be directed at them in major urban areas. In 2020:
- Climate change will affect home buyers and sellers in as financial costs will be affected by insurance plans
- Higher insurance premiums in the areas that have the highest risk
- Lack of insurance being provided
- Housing will be less affordable for people
- Impossible for people to secure a mortgage
Urbanization of Suburbs
Focus came to the suburban markets rather than urban markets. Development trends will increase in the suburban community as prices increase on retail and restaurant amenities as well as livability and walkability, affecting renter preferences too.
Stabilization of Fixed Rates
Housing market has remained strong throughout the year, but it is sectors like the manufacturing industry which has been pulling down the economy. Investors are still considering the possibility for a recession; mortgage rates might not fall lower than 3.5% in the upcoming year even if the economy weakens any further.
Mortgage rates are still expected to remain below 4.1% with the strengthening of the economy. Therefore, 2020 will follow a 30-year fixed mortgage rate remaining low, on an estimate of 3.8%.
Decrease in Entry-level Homes & Construction Workers
Entry-level homes are two or three-bedroom houses, which are decreasing due to the lack of homes for sale as compared to the amount buyers in the market. This is why the prices for the existing entry-level homes is increasing and new construction of them is decreasing.
On the other hand, there has been a shortage in construction workers, affecting the construction industry. However, new technology is introduced in the industry to address problems like worker availability and their skill levels.
