Why does the price of real estate change, by various amounts, during different periods of time, etc.? Those who look at this, from a historical perspective, realize that the only thing predictable is that it is challenging to know, in advance, what will happen in the near and far future! In recent years, the cost of homes, in many areas, has increased, for a variety of reasons. Some of these include: historically low interest rates (which has brought very low mortgage rates); seven consecutive years of a quality economy; consumer confidence; a sense of security at work; etc. At the same time, some factors present challenges, such as: the current high level of house prices; politics; Tax laws; and forecast future economic conditions, etc. With that in mind, this article will briefly attempt to consider, examine, review, and discuss 5 considerations that may affect the real estate market in 2020.

1. General economic conditions: Will the economy continue to be strong or will we see certain warning signs of a possible recession or slowdown? What will be the public perception, etc.? Will the labor market be strong and will it result, in the future, in a greater participation, in the so-called American Dream, of having their own home? What will the cost of rents be for people looking to buy homes? Will all segments of the housing market get stronger, weaker, or stay the same? Will the top end be stronger or weaker than the bottom end or the midmarket?

two. Interest rates: We have been witnessing very low mortgage rates for several years, so will this trend continue, or will these rates start to rise? Since low mortgage rates mean you can buy more home for your dollars, if they go up, what effect will that have on home prices?

3. Impacts of tax laws: Tax reform legislation, passed in 2017, brought a cap on state and local taxes, or SALT, that are deductible for income tax purposes. In states where there may be an impact, high-end real estate may be adversely affected.

Four. Consumer confidence: The higher the consumer confidence, the stronger the real estate market will be! When people believe that everything will be fine, they are more willing to commit to significant investments, and for most Americans, home equity represents their single largest financial investment.

5. House prices: How high can house prices go before there could be some short-term correction?

Be a wise consumer and know as much as possible about the real estate market and its possibilities! Are you prepared for this task?