Last Updated on October 20, 2022
Allen Tate President/CEO Pat Riley forecasts trends for the year
It’s a New Year – and an election year. So what does that mean for real estate in the Carolinas?
“A home in good condition, at any price point, will sell in 2020,” said Allen Tate Companies President and CEO Pat Riley.
In the January edition of Carolinas Market Update, Riley shares his 2020 vision – and casts a vote for homeownership in a year that will definitely be “a little interesting.”
Historically, very little changes with the economy in a year leading up to a Presidential election, Riley said.
“We’ve been in lowest interest rate, post-recession positive cycle in history. Any change in that will be pushed back for another year,” Riley said.
Continued low interest rates, elevated appreciation rates and lack of inventory at the most desirable price points will all be factors in the coming year.
- Interest rates. Riley predicts interest rates in the range of 3.62 to 3.7% for the year ahead, still well below the historic average of 7.3% – and will not be a factor impeding home ownership in 2020.
- Appreciation rates. While very neighborhood-specific, appreciation rates will remain elevated way above historic norms of 2.5% due to the lagging supply. Riley forecasts appreciation of 2.5% at the higher price points and appreciation of up to 3.7% for homes in the sweet spot of $175K to $400K in areas where in-migration and job creation is strong. That’s great news for sellers, but not so much for those chasing the homeownership dream, Riley said.
- Inventory. Carolina builders are still producing half of the needed inventory, achieving high margins on ground they currently hold, but stymied on future development opportunities because of cost. Boomers refusing to downsize until well into their mid-70’s are also keeping inventory in check.
In short: Lots of opportunity. Strong economy. No good excuses to put off homeownership in 2020.
“The basics of supply and demand are in play. Low rates, lack of inventory and in-migration will just make the journey a little more interesting,” Riley said.
Carolinas Market Update is targeted to consumers in the Charlotte, Triad, Research Triangle, High Country and Upstate S.C. regions. It is produced every other month by the Allen Tate Companies and features information, statistics, trends and predictions about the real estate market in North and South Carolina.