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Will the Boise, Idaho Housing Market Crash in 2022?

Key highlights from this report:

  • The Boise housing market has been sizzling over the past 15 months or so.
  • Home prices have skyrocketed due to strong demand and low inventory.
  • Some people now fear that a real estate downturn or crash is coming.
  • But a Boise, Idaho housing market crash in 2022 seems highly unlikely.

What can we say about the real estate scene in Boise, Idaho that hasn’t been said already? To call it a hot housing market would be quite the understatement. Turbo-charged, sizzling and ridiculous are more appropriate descriptors.

According to the latest data, the median home value for the Boise-Nampa metro area rose by more than 40% over the past year or so. That’s about ten times the average annual increase in home prices within the U.S., over the past 40 years.

So yes, it’s a “hot” housing market.

But given this meteoric rise in home values, some are now wondering if the Boise housing market will crash in 2022. Will the real estate bubble pop next year? Or will it just keep swelling?

Will the Boise Housing Market Crash in 2022?

Let’s start with the obvious disclaimer. No one can predict future housing market or home price trends with complete accuracy. If the past 18 months have taught us anything, it’s that uncertainty is alive and well in the world.

That being said, it seems highly unlikely that the Boise real estate market will crash in 2022. After all, a housing “crash” occurs when home prices drop sharply, often due to a surplus of supply and/or a sudden drop in demand.

But those conditions are not present within the Boise housing market.

On the contrary, this metro area is still experiencing very strong demand coupled with very low supply. Historically speaking, real estate markets don’t crash under such circumstances. They tend to keep climbing, in terms of home prices.

So no, the Boise real estate market probably won’t crash in 2022.

A more likely scenario is that home prices across the Boise-Nampa metro area will rise more slowly over the coming months. But they’ll almost certainly keep climbing to some degree.

Supply-and-Demand Imbalance Continues

When real estate markets “crash” (or experience a sharp downturn in home prices and sales), it’s usually caused by a major change on either the supply or demand side. Or both sides.

For instance, when the supply of homes for sale greatly exceeds the demand from buyers, prices tend to drop. Sometimes significantly. The same thing can happen if home buyers suddenly stop buying houses, for whatever reason.

But when you look at current conditions within the Boise, Idaho real estate market, you’ll see the exact opposite. You’ll see a housing market where the demand for homes greatly exceeds the available supply.

That’s the number-one reason why we probably won’t see a Boise real estate crash or bubble burst in 2022. The current imbalance between supply and demand will put upward pressure on prices, at least for the foreseeable future.

As of July 2021, the Boise metro area had about a one-month supply of homes for sale. That’s a much lower level of supply than most other major cities across the U.S., and miles below what’s considered to be a “balanced” market.

With such tight supply conditions, home buyers in the area have to compete fiercely for one another. This competition has boosted home prices to unprecedented levels (see below).

On the demand side, the Boise metro area has seen explosive population growth in recent years. Meridian, Idaho was recently ranked as one of the fastest growing cities in the country. This growth trend actually predates the pandemic, but COVID-19 gave it a big push.

The bottom line here is that a seriously lopsided supply-and-demand situation will help shield Boise from a housing market crash in 2022.

A Positive Home-Price Forecast for Boise Area

This month, Zillow predicted that home prices across the Boise, Idaho metro area would rise by double digits over the next 12 months. But their long-range forecast pales in comparison to the unprecedented price gains of the previous 12 months.

According to a September 2021 statement on the company’s website:

“Boise City Metro home values have gone up 44.1% over the past year and Zillow predicts they will rise 18.4% in the next year.”

That 44% figure above has caught the eye of housing analysts and economists. It also landed Boise on a list of the nation’s most overvalued real estate markets.

Researchers from Florida Atlantic University recently published the results of a study that compared current home price trends to historical pricing trends. The goal was to determine which metropolitan-level real estate markets are overvalued, and which ones are undervalued.

To quote the FAU report:

“The nation’s most overvalued market is Boise, Idaho, where homes are selling for 80.64 percent more than they should, based on a history of past pricing. Work-from-home consumers priced out of other markets during the pandemic appear to be leaving those expensive cities and driving up values in Boise.”

This is one reason why some home buyers and homeowners in the area worry that the Boise housing market will crash in 2022. They fear the local real estate scene is currently in a bubble phase, and that the bubble will pop in 2022 or beyond.

Those are valid concerns, given the ludicrous rise in home values over the past year. But, as we’ve already stated, a Boise real estate crash in 2022 seems very unlikely at this stage. The dearth of inventory and steady demand from buyers will probably keep prices climbing — to some degree.

A Real Estate Market ‘Correction’ Is More Likely

So, a major market downturn or crash probably won’t hit the Boise area any time soon. A more likely scenario is that prices will begin to rise more slowly over the coming months. Economists often refer to this as a “correction.”

Without nitpicking over specific numbers, the Zillow forecast mentioned above seems realistic. It’s hard to imagine that home values in the Boise area could continue rising at their current pace. A market correction in 2022 could bring slower price growth, compared to what we’ve seen over the past 12 months.

Disclaimer: This article contains forecasts and forward-looking statements relating to the real estate market, home prices, etc. Such statements are the equivalent of an educated guess and should be treated as such.

Houston skyline photo

Houston, Texas Housing Market Forecast for 2022

A recent home-price forecast for the Houston, Texas real estate market in 2022 predicted that house values across the metro area would continue to rise next year. This Houston housing market forecast was issued by the real estate data company Zillow, in September of 2021. The company predicted home prices in the area would rise by double digits between now and September 2022.

Positive Forecast for Houston Housing Market in 2022

Like most major cities across Texas, the Houston real estate market has experienced a significant increase in home prices and sales over the past year. Limited supply and strong demand from buyers have put upward pressure on home values all across the metro area.

A recent forecast for the Houston housing market predicted that home values would continue to climb through the end of 2021 and into 2022. Similar predictions were issued for other major cities across Texas.

In September 2021, the research team at Zillow issued a positive real estate market forecast for Houston stretching into 2022. By their estimation, the median home value for the Houston-The Woodlands-Sugar Land metropolitan area rose by around 15% over the past year or so.

Looking forward, the company’s forecast predicted that prices would rise by around 12.9% over the next year. This Houston housing market forecast extends into September 2022.

According to a September 2021 statement on the company’s website:

“The typical home value of homes in Houston-The Woodlands-Sugar Land Metro is $258,174. This value is seasonally adjusted and only includes the middle price tier of homes. Houston-The Woodlands-Sugar Land Metro home values have gone up 15.0% over the past year and Zillow predicts they will rise 12.9% in the next year.”

Real Estate Inventory Still Tight, But Improving

Supply levels have a lot to do with the Houston real estate market forecasts and predictions for 2022. For many months now, this metro area has experienced very low inventory levels within the housing market. The same is true for most major cities across Texas.

The short version of the story is that there just aren’t enough homes on the market in the Houston area to satisfy the demand from buyers. This is largely why this housing market has received positive price forecasts extending into 2022.

According to a September 2021 report from Realtor.com, the total number of active real estate listings in the Houston metro area had declined by -25% over the previous 12 months. That means there are fewer homes for sale today than there were a year ago.

But that report also offered a bit of good news or home buyers in the Houston housing market. While total listings were down year-over-year, the report showed a 4.4% increase in the number of new listings. This means there have been more homes coming onto the market in recent weeks.

If inventory growth continues over the coming months, it could affect the Houston housing market forecast for 2022. Recent predictions suggest that home prices in the area will continue to climb. And that seems likely based on current conditions. This real estate market could gradually shift back toward a more normal balance in 2022, especially if more homes come onto the market.

Population Growth Affecting Houston Housing Forecast

Population growth is also affecting Houston real estate forecasts and trends.

According to the U.S. Census Bureau, the population of Houston, Texas rose by 10.7% from 2010 to 2019. Those were the most recent figures available when this article is published. Other cities across the metro area have seen even greater population growth in recent years.

This is another important factor affecting Houston real estate predictions and forecasts for 2022. After all, those new residents need somewhere to live. Population growth tends to increase demand for housing on both the purchase and rental side. It brings more home buyers into the market, increasing competition and boosting prices.

All of this comes at a time when inventory levels are still very low.

Report: Price Reductions Becoming More Common

The September 2021 Realtor.com report also revealed an increase in the number of price reductions within the Houston housing market. The number of real estate sales involving a price reduction from the seller increased by 22% in August 2021, compared to a year earlier.

This is another sign that the Houston housing market might be shifting a bit. It’s still a seller’s market in terms of overall supply and demand. But conditions do appear to be “normalizing” a bit. This is another trend that could carry over into 2022.

Summary of Key Points

We’ve covered a lot of information in this report. So we’ll leave you with a summary of the most important points.

  • Houston housing market forecasts for 2022 predict that home values will continue rising over the coming months.
  • The Houston real estate market is still experiencing a shortage of supply, relative to demand.
  • The good news for buyers is that new real estate listings appear to be rising in 2021.
  • The Houston housing market could cool down a bit in 2022, especially if inventory continues to rise.

Disclaimer: This article includes Houston real estate market predictions and forecasts issued by third parties not associated with publisher. MetroDepth makes no claims about future conditions within the housing market or broader economy.

Austin skyline photo

Will Austin, Texas Home Prices Drop in 2022, or Keep Climbing?

Will home prices in Austin, Texas drop or go down in 2022?

That’s a question on the minds of a lot of people right now. Given the meteoric rise in home values over the past 12 to 18 months, it’s only natural to wonder if the Austin real estate market is due for a downturn.

Here’s the short version: While no one can predict future real estate trends with complete certainty, it seems highly unlikely that home prices in Austin, Texas will drop or go down in 2022.

On the contrary, all of the conditions are in place for sustained growth over the coming months. A seriously imbalanced supply-and-demand situation within the Austin housing market should continue to put upward pressure on home prices through 2021 and into 2022.

Austin Home Prices (Probably) Will Not Drop in 2022

It’s no secret that Austin, Texas is currently one of the hottest housing markets in the country. This is the result of several overlapping factors, most of which have to do with supply and demand.

For starters, the Austin-Round Rock metropolitan area has seen explosive population growth over the past few years. This trend actually accelerated during the coronavirus pandemic. Suddenly, a lot of people were leaving more crowded and more expensive cities for destinations like Austin, Texas.

While all of this population growth was happening, housing market inventory continued to plummet. In 2021, Austin has suffered from one of the lowest levels of housing supply of any major city in the U.S.

This unusual supply-and-demand situation has greatly increased competition within the local housing market. It’s also the number-one reason why Austin home prices probably will not drop or go down in 2022. It’s hard to imagine a scenario where house values in the area would suddenly level off or experience a downturn.

The more likely scenario is that home prices in Austin will keep rising in 2022, but possibly at a slower pace than what we’ve seen over the past year.

Eventually, the Austin real estate market will reach a kind of “tipping point” where price growth begins to slow down. This frequently happens in fast-rising housing markets, as more and more buyers get “priced out” of the real estate scene. Over time, rapidly rising home values shrink the pool of qualified buyers. This leads to a reduction in demand and slower price growth going forward.

This is a pattern we’ve seen in many of the nation’s hot real estate markets, from San Francisco to Seattle. While the timing aspect is uncertain, it seems likely that Austin will follow the same pattern to some extent.

Getting back to the question at hand: Will home prices in Austin drop or go down in 2022? Currently, all signs point to “no.” The most likely scenario, based on current housing market conditions in the area, is a continuation of price growth. We don’t know how much Austin home values will rise in 2022. But they could continue to climb by double digits year-over-year.

One of the Fastest-Rising Housing Markets in the U.S.

In July 2021, Realtor.com published a housing market report with data for 50 of the nation’s largest markets. According to that report, the Austin metro area experienced the highest level of home price growth from June 2020 to June 2021. This was based on year-over-year changes in list prices, specifically.

During that 12-month timeframe, the median list price in Austin, Texas rose by more than 34%. That put it ahead of the other 49 housing markets contain within the Realtor.com report.

To quote that report:

“Among the nation’s 50 largest markets, Austin, Texas continued its 2021 streak of taking the top spot by price growth, up 34.3% year-over-year. Riverside, Calif., and Tampa also saw some of the biggest price gains over last year, with each rising by 19.6%.”

Given those statistics, you can see why it’s unlikely that Austin home prices would drop in 2022. It would take a lot to make that happen (like a complete meltdown of the local economy).

Supply and Demand Imbalance Will Carry Into 2022

As stated earlier, a stark imbalance between housing market supply and demand is the top reason why Austin home prices likely will not go down in 2022. Like many cities across the country, the Austin metro area real estate market is currently experiencing a major shortage of supply. There aren’t nearly enough homes on the market to satisfy the demand from buyers.

The Austin-Round Rock metro area had about a 1.2-month supply of homes for sale in June 2021. That is miles below what’s considered to be a “balanced” real estate market. It is this ongoing supply shortage, combined with steady demand from home buyers, that has turned it into a red-hot seller’s market.

So, will home prices in Austin, Texas start dropping in 2022? Based on current conditions, that is a highly unlikely scenario. That doesn’t mean it’s impossible. It just means it would take a lot to reverse the current trend of rapidly rising home prices in Austin.

This real estate market could start to cool down in 2022. In fact, we’re seeing some early signs of that already, in the form of declining sales. But the lopsided supply and demand situation will probably keep Austin home prices rising well into 2022 — and possibly beyond.

Phoenix road sunset

Why the Phoenix, Arizona Housing Market Won’t Crash in 2021

Will the Phoenix housing market crash in 2021? Probably not. Low inventory and strong demand (fueled by population growth) have kept home prices moving north over the past year. And we expect to see more of the same in 2021.

Here are three reasons why the Phoenix, Arizona real estate market probably won’t crash in 2021.

Three Reasons Why the Phoenix Housing Market Won’t Crash in 2021

Above-average population growth. Very low supply levels. And positive forecasts from real estate researchers.

Those are just a few of the reasons why the Phoenix housing market won’t “crash” in 2021 or experience any kind of major downturn. Let’s take a closer look at these three factors.

1. Phoenix’s population continues to grow at a rapid pace.

The population across the Phoenix metro area continues to grow steadily from one year to the next. According to the U.S. Census Bureau, the population within the city of Phoenix itself rose by 16.2% from 2010 to 2019. That was more than double the national growth rate during that same nine-year period.

Population growth tends to increase demand for housing on both the purchase and rental side. And that’s one reason why we won’t see a real estate market crash in Phoenix anytime soon. There are just too many home buyers entering the market in 2021, increasing demand and propping up prices.

According to a recent population study by conducted by researchers at Freddie Mac, Phoenix is one of the fastest growing cities in the country. To quote that report:

“As previously discussed, the fastest growing cities (in absolute terms) are mostly concentrated in the Southern and Western states. Phoenix, AZ, Houston, TX, San Antonio, TX, Los Angeles, CA, and Austin, TX are among the top ten urban areas that have experienced the most population increases.”

The bottom line here is that the Phoenix real estate market is getting a steady influx of home buyers from other parts of the state, and also from across the country. This has increased demand at a time when housing inventory remains low. And it’s one of the top reasons why the real estate market in Phoenix won’t crash in 2021.

2. Housing market inventory remains very low.

Planning to buy a house in the Phoenix area during 2021? Better get in line.

There are plenty of buyers in this market right now, but not enough homes for sale to satisfy demand. For years, this imbalance between supply and demand has put sustained upward pressure on home prices across the Phoenix metro area. It will likely continue throughout 2021 as well.

At the end of 2020, the Phoenix area had about a one-month supply of homes for sale. That was below the national average during that same month, and miles below what’s considered to be a balanced real estate market.

Tight inventory conditions have put sellers into the driver’s seat. Like many cities across the country, the Phoenix housing market currently favors sellers over buyers when it comes to negotiating ability. It’s a seller’s market, in terms of inventory levels. And it will probably stay that way for the foreseeable future.

One of the conditions that often lead to a real estate market downturn or crash is an excess of supply. We saw this back in the mid to late 2000’s, when there was a real estate construction boom in Arizona and many other parts of the country.

Today, however, the Phoenix real estate market is experiencing the exact opposite — there’s not enough inventory.

Additionally, mortgage default and foreclosure rates are currently well below where they were during the last housing market crash. Aside from the aforementioned supply shortage, the Phoenix real estate market is actually quite stable right now.

3. Home prices are predicted to continue rising.

Home prices in the area are expected to continue climbing for the foreseeable future. That’s the general consensus among a number of industry analysts and economists.

In December, the research team at Realtor.com published a forecast for the U.S. real estate market extending through 2021. They also made predictions for individual cities across the country.

For Phoenix, Arizona, they predicted that home sales would rise by 11.4% in 2021. They also predicted that the median home price in the area would rise by around 7% during 2021. No “crash” in that forecast.

Similarly, the real estate data company Zillow offered a positive (and strong) forecast for this market. In January, they said that home values within the Phoenix-Mesa-Scottsdale metro area “have gone up 15.3% over the past year and Zillow predicts they will rise 10.4% in the next year.”

Phoenix area home price chart
Chart: Home values in the Phoenix metro area | Source: Zillow.com

If a picture is worth a thousand words, the chart above speaks volumes. It shows the median home value for the Phoenix-Mesa-Scottsdale metro area, going back about ten years. As you can see, prices have been following a steady upward trajectory for most of that time. Zillow’s forecast is shown in the green shaded area on the right. No crash expected here, either.

Disclaimer: This article explains why the Phoenix, Arizona real estate market probably won’t crash in 2021 or anytime soon. This assessment is based on ever-changing conditions. No one can predict future housing or economic trends with complete accuracy. This report is the equivalent of an educated guess and should be treated as such.

East Village in San Diego

Will San Diego Home Prices Drop in 2020, Due to the Economic Slowdown?

Will home prices in San Diego drop later in 2020, as a result of the coronavirus pandemic and the broader economic downturn?

This is a big question on the minds of many San Diego residents right now. While no one can predict future housing market conditions with complete certainty, we can make an educated guess based on current real estate and economic conditions.

Our view: San Diego home prices will probably rise more slowly, or even flatline, between now and the end of 2020. They might even dip slightly over the coming months. But we do not expect to see a major drop in San Diego home prices during 2020, despite the negative economic effects of the coronavirus health crisis.

Will San Diego Home Prices Drop in 2020?

One recent forecast predicted that house values in San Diego, California could dip slightly over the next year or so. That prediction came from the real estate research team at Zillow.

In early June 2020, analysts from Zillow stated the following: “San Diego home values have gone up 6.0% over the past year and Zillow predicts they will fall -0.8% within the next year.”

As of late May, the median house price in San Diego was around $680,000.

As mentioned earlier, we expect property appreciation in the area to slow down over the coming months, and possibly level off. But we do not expect San Diego home prices to drop significantly in 2020 or early 2021. Beyond that is anyone’s guess.

Other sources have weighed in on this subject recently, with views similar to our own. In a May 2020 article for the San Diego Union Tribune, one California economist explained why home prices aren’t dropping right now, as one might expect.

Ralph McLaughlin, chief economist with the real estate co-investing company Haus, told the Tribune:

“… we’re seeing sellers pull back even more than buyers. That’s actually leading to a scenario where prices are mostly not falling. The lack of price declines and demand outpacing supplies might be good news. That’s because it suggests we might not see the collapse of the housing market like we did in 2007 and 2008.”

A Strange Time for the Real Estate Market

We are at an interesting time right now, from a real estate perspective. Due to rising unemployment in the San Diego area, there are fewer buyers in the market looking for homes.

You might expect such a reduction in demand to take the steam out of home values, leading to price erosion. But we’re not seeing that right now, as of late spring 2020.

One reason is that many sellers have exited the housing market as well. A lot of sellers in San Diego and nationwide have taken their homes off the market due to coronavirus-related concerns, or because they feel there’s not enough demand out there.

It’s a unique situation where there are almost equal reductions in supply and demand. If it were just one of the other, it would likely have a significant impact on house values going forward. But with declines on both sides of the equation, San Diego home prices might actually weather the economic storm.

Population Growth Is Fueling Demand

Population trends in the area could also help prevent San Diego house values from dropping in 2020.

According to the U.S. Census Bureau, the city’s population grew by 9.4% from 2010 to 2019. That was well above the national growth rate of 6% during that same nine-year period.

With its great weather, beautiful beaches and other attractions, San Diego lures new residents from elsewhere in the state and across the country. This brings more home buyers into the local housing market, thereby increasing demand and helping to sustain home values.

Unemployment: A Dark Cloud Over the Housing Market?

If home prices in San Diego do drop during 2020 or 2021, it will largely be the result of rising unemployment.

According to the California Employment Development Department, the unemployment rate for the San Diego-Carlsbad metro area rose from 4.2% in March 2020 to 15% in April.

Of course it’s not just San Diego suffering that fate. The jobless rate has risen sharply across the nation as a whole, as local economies have been shut down to halt the spread of the coronavirus.

The state of California is gradually reopening its economy in a stage-by-stage fashion. According to the states “Resilience Roadmap,” California is currently in stage two of a four-part economic reopening plan.

As more and more businesses are allowed to reopen again, the jobs will slowly come back and the unemployment we will gradually decline. It will take time, but it will happen.

Whether or not San Diego home prices drop in the meantime will largely depend on how long all of this takes. There’s also a possibility that we might have to go back to the stricter stay-at-home orders, if coronavirus cases rise after reopening. Let’s all hope for the best on that front!

Bottom line: Will home prices in San Diego drop in 2020? No one cay say for sure. But based on the current supply-and-demand situation in the area, a major drop in home values seems unlikely. The more likely scenario, at this point, would be a slowdown in price growth — or a slight (and temporary) decline in house values.

Disclaimer: Economic and housing market forecasts are the equivalent of an educated guess and should be treated accordingly. No one can predict future housing conditions with absolute certainty. MetroDepth makes no assertions regarding future real estate conditions in San Diego or elsewhere.

Seattle skyline

Summer 2020: A Good Time to Buy a Home in Seattle?

Highlights from this housing report:

  • Now could be a good time to buy a home in Seattle, Washington.
  • Mortgage rates recently hit an all-time record low.
  • Local home prices could dip later in 2020, but should rebound.
  • Low inventory continues to be an issue for Seattle buyers.

Is Now a Good Time to Buy in Seattle?

Will summer 2020 be a good time to buy a house in Seattle, Washington? That depends. For buyers with the financial means to do so, now could be a great time to buy a house.

Mortgage rates are hovering at a historical low. And there are fewer buyers in the market, due to the public-health crisis and economic downturn we are experiencing.

On the other hand, now is also a challenging time to buy a home in Seattle because of low inventory levels. The number of homes listed for sale was low going into the COVID-19 crisis. It has since dropped even lower, as some home sellers have taken their properties off market.

Ultimately, only you can decide if now is a good time to buy in Seattle. The key is to make an informed decision, based on current trends within the real estate market and broader economy. And that’s where we come in.

Here are trends and developments you should know about, if you’re planning to buy a home during the summer or fall of 2020.

Home-Price Appreciation Could Slow in 2020

As you can see in the chart below, home prices in Seattle, Washington rose steadily and significantly from 2012 to 2018. But following that six-year upward climb, house values began to decline. That was partly due to affordability issues and a growing reluctance among buyers.

Seattle price chart through May
Chart: Seattle home prices trends and forecast. | Source: Zillow.com.

Over the past year, however, home prices in Seattle have showed renewed strength. According to the real estate information company Zillow, the median home value in Seattle rose by 2.2% over the past year. Looking forward, they predict that prices will dip slightly over the next 12 months.

As of early June 2020, the company had the following forecast posted on its website: “Seattle home values have gone up 2.2% over the past year and Zillow predicts they will fall -1.7% within the next year.”

But when you zoom out and look at the broader metro area, there’s less volatility.

The chart below shows the house-price index for the Seattle-Bellevue-Kent metropolitan statistical area. It’s based on data collected by the Federal Housing Finance Agency. As you can see, the median home value for the broader metro has risen somewhat steadily (after bottoming out in the wake of the last recession).

Seattle metro area prices

The bottom line here is that the Seattle real estate market is still experiencing a supply-and-demand imbalance. Heavy on the demand side, but short on supply. That will continue to put upward pressure on home prices through 2020 and into 2021.

The Lingering Effect of COVID-19 

As you probably already know, Seattle was one of the early epicenters of the coronavirus pandemic. In addition to prompting an economic shut down, the outbreak gave the densely populated city a kind of stigma among home buyers.

Now, in late spring 2020, data suggest that more and more buyers are looking at the surrounding areas where they can get more space. During the second half of 2020, and also into 2021, we could see higher demand (and home-price strength) in the cities and towns surrounding Seattle proper.

But getting back to the question at hand: Is now a good time to buy a home in Seattle? Does it make sense to buy a house in the area in summer 2020 or later this year?

Here’s the home-value side of it. House prices in Seattle will almost certainly rise more slowly in the coming months, due to high unemployment and other economic issues. Prices might even dip slightly during the second half of 2020. But these effects will likely be short-term in nature. As the public-health crisis eases, and the economy starts to reopen again, home-buying demand will likely rise.

In fact, we are starting to see this trend already. A recent report from the Mortgage Bankers Association revealed a 7% increase in home purchase loan applications nationwide, and a 9% increase year-over-year.

Low Inventory a Challenge for Seattle Buyers

As mentioned earlier, the Seattle real estate market is experiencing a severe shortage of housing inventory. There just aren’t enough homes on the market to satisfy the demand from buyers. This creates a seller’s market situation, in which buyers have to compete for limited properties.

The inventory situation is most severe within the city of Seattle itself. But it’s also affecting the broader metro area, including cities like Kirkland, Bellevue and Redmond — and Tacoma to the south.

According to a recent report from the Northwest Multiple Listing Service (NWMLS), available property listings in the Western Washington region have declined sharply over the past few months.

According to a May 2020 press release from NWMLS:

“The Northwest MLS report for April shows area-wide inventory fell nearly 21% from a year ago, dropping from 12,955 listings to 10,282.”

In some respects, now could be a very good time to buy a home in Seattle. That’s especially true for buyers who plan to use a mortgage loan. (More to follow on that.) But the inventory situation is a real concern for those planning to buy a home in Seattle during summer or fall of 2020.

Our advice for buyers is to start early and allow plenty of time to find a suitable property. Also, be prepared to make compromises regarding the features you want in a home. You might even consider some of the surrounding cities where prices can be lower and supply levels higher.

Let’s move on to talk about another big reason why now could be a good time to buy a home in Seattle…

Mortgage Rates Hit a Historic Low (Again)

If you follow real estate market news, you’ve probably seen the phrase “record-low mortgage rates” quite a bit in recent weeks. That’s not marketing hype. Mortgage rates have actually broken several records over the past few weeks.

They recently sank to their lowest point in 50 years of record-keeping, and they could drop even further as we enter summer of 2020.

From an interest-rate standpoint, now is a great time to buy a house in Seattle or anywhere else in America. Never before have we seen rates as low as they are right now.

The average rate for a 30-year fixed mortgage loan fell to an astoundingly low 3.15% during the last week of May. That’s based on the weekly industry survey conducted by Freddie Mac.

According to Freddie Mac’s research team:

“The 30-year fixed-rate mortgage has again hit the lowest level in our survey’s nearly 50-year history, breaking the record for the third time in just the last few months. These unprecedented rates have certainly made an impact as purchase demand rebounded from a 35 percent year-over-year decline in mid-April to an 8 percent increase as of last week…”

The Bottom Line to All of This

The bottom line here is that there are some good and bad things about the Seattle real estate market, from a home buyer’s perspective.

Home prices are a little iffy right now, and we might see some price erosion over the coming months. But that will likely be a short-term trend, after which home values should begin to climb again.

Inventory remains very tight within the Seattle housing market. Buyers entering the market in summer 2020 or later in the year should expect stiff competition from other buyers.

On the mortgage rate side of things, there has been nothing but good news in recent weeks. Mortgage rates have sunk to an all-time record low and they could fall even further later this year. Some forecasters have predicted that the average rate for a 30-year mortgage loan could fall below 3% by the end of 2020.

As you can see, there’s a lot to consider here. But we hope this information makes it easier for you to answer that important question: Is now a good time to buy a home in Seattle?

Disclaimer: This article includes forecasts, projections and predictions relating to the real estate market. Economic and housing forecasts are the equivalent of an educated guess and should be treated as such. MetroDepth makes no assertions about future economic conditions.

Smart phone showing 2020

Mortgage Industry Outlook for 2020 Mostly Positive

Highlights from this article:

  • A mortgage industry forecast for 2020 predicts a slight drop in originations.
  • But overall, 2020 is expected to be a good year for lenders in the U.S.
  • Rates are expected to remain low over the coming months.
  • Purchase loans will likely continue to dominate the market.
  • Learn more about these and other predictions below.

The latest mortgage industry outlook from Freddie Mac suggests that 2020 could be another solid year for the lending industry. Low mortgage rates and generally favorable economic conditions are expected to increase home sales in 2020, compared to 2019.

In September 2019, Freddie Mac published its latest economic and housing market forecast with predictions extending through 2020. Among other things, they issued several positive predictions for the mortgage industry next year.

Here’s a recap of the key points from their outlook, along with some supporting data and commentary.

Positive Outlook for Mortgage Industry in 2020

As of late October 2019, mortgage rates were still down considerably from the same month a year earlier. That, along with other factors, could boost U.S. home sales and construction through the end of 2019 and into 2020.

A strong job market and consumer confidence are helping as well. Unemployment collection is currently near its lowest level since the 1970s, and jobless claims are also hovering at historical lows as of fall 2019.

All of these factors (including low mortgage rates and a strong job market) have contributed to Freddie Mac’s mostly positive prediction for the mortgage industry in 2020.

The group expects total origination volume to hit $2.1 trillion in 2019 (by the end of the year), followed by a slight decline to $1.8 trillion in 2020. The chart below shows purchase and refinance origination volume over the past few years, with a forecast for 2020.

Source: Freddie Mac September 2019 Economic and Housing Research Forecast

Rates Expected to ‘Remain Low’ Into Next Year

Global bond markets have been given a shot of volatility in recent months, mostly due to ongoing trade disputes. And as usual, investors have turned to the relatively stability and safety of U.S. Treasuries. This trend has put downward pressure on interest rates, leading to the low-rate environment we are currently seeing in fall 2019.

But what about next year?

Freddie Mac’s 2020 mortgage industry outlook predicts that long-term rates will “remain flat on average” over the coming months. Despite the inevitable ups and downs, they do not anticipate a significant or lasting rise in rates anytime soon.

“We forecast the 10-year yield to average 1.8% in 2020, down from an annual average of 2.1% in 2019,” the report stated.

Low treasury yields tend to go hand-in-hand with low mortgage rates. And that’s another key industry prediction the group offered last month. They expect 30-year fixed mortgage rates to average 3.7% in the fourth quarter of 2019.

Here’s something that might come as a surprise. Industry forecasts for 2020 suggest that rates could actually be lower, on average, then they have been this year. To quote their September outlook report: “We project the annual average to be 4.0% in 2019 before declining to 3.8% in 2020.”

Home Sales Expected to Remain Strong Next Year

Given Freddie Mac’s favorable outlook for the mortgage industry and the broader economy in 2020, it’s no surprise to see them predicting “positive momentum” for home sales.

The group’s forecast for total home sales (which includes both new and existing units) suggests that we could see a slight uptick in sales next year. They predicted sales would end up totaling 5.98 million for this year, followed by 6.03 million in 2020.

But, as always, there is some regional variation to all of this. Some local housing markets are more sluggish than others, at present. And that will likely carry over into 2020 as well.

Home Prices Predicted to Rise Further in 2020

Home prices in most U.S. cities are expected to continue rising through 2019 and into 2020.

In fact, the team at Freddie Mac predicted that price growth could “continue to beat expectations in the coming months.” Their prediction is that home values will rise 3.4% in 2019, and then taper off to an annual gain of 2.6% in 2020.

That forecast closely resembles one issued by Zillow recently. In October, the economic research team at Zillow stated: “United States home values have gone up 4.8% over the past year and Zillow predicts they will rise 2.8% within the next year.”

Of course, prices aren’t rising everywhere. Some cities across the country are experiencing a downturn right now, in terms of home values. Seattle; San Jose; and Portland, Oregon all fall into that category, as do many other cities. But overall, prices are still climbing across the U.S.

So, as we can see, the housing market and mortgage industry outlook for 2020 is mostly positive. While home-price appreciation could decline a bit next year, mortgage lending activity is expected to remain strong due to low rates and a robust economy.

Is Your Mortgage Marketing Program Geared Up for 2020?

The latest predictions suggest that 2020 could be another solid year for the mortgage industry. The question is, are you poised to take advantage of it?

We can help you grow your business in 2020 by developing a website content and publishing strategy. We can handle everything from topic research to writing to search engine optimization. The end result is more traffic to your website — and more exposure for your business.

Contact us today to learn more about our mortgage blogging services.

Young plant sprouting

Best Way to Grow Your Mortgage Business in 2020

Looking for a way to grow your mortgage business in 2020? Give blogging a try. By publishing quality content onto your site on a regular basis, you can attract more and more borrowers who are in the market for a loan.

We’ve been using this strategy for more than 15 years, because it works. Blogging and content marketing are one of the best ways to grow your mortgage business and attract new clients.

In this article, we’ll take a look at some of the content-based strategies you can use to boost your website traffic and leads.

‘What’s the Best Way to Grow My Mortgage Business?’

This is the million-dollar question (literally, in some cases) that mortgage professionals often ask. What’s the best way to grow my business? To generate more leads? To originate and close more loans? 

The answer is simple. The best way to grow your mortgage business is … wait for it … the one that works best for you. It depends on your goals, what you’re trying to accomplish, and who you are trying to reach.

The best marketing strategy for one mortgage company might not work as well for others. So you have to experiment. There’s no shortcut around that.

If one of your marketing goals is to bring more visitors to your website, you’ll want to implement some kind of publishing strategy. And blogging is a great place to start. In fact, I would argue that it’s one of the best ways to grow your mortgage business in 2020.

Developing a Website Content Strategy for Business Growth

What would it do for your mortgage business if your website traffic were to go up by 200%? But wait. Let’s think bigger. What about a 500% increase in website traffic, over the course of six or seven months? What might that do for your business?

These goals can be accomplished through a content-based mortgage marketing program, such as blogging. In fact, this is the core service we provide to our clients. We help them attract more borrowers to their websites, by publishing high-quality web content on a regular basis.

Blogging and other forms of website publishing are one of the best ways to grow your mortgage business, for the following reasons:

  • Cost — Publishing content onto your website is free, if you do it yourself. And even if you outsource, it’s still fairly affordable when weighed against the benefits.
  • Scale — There’s no limit to how far you can go with a content-based mortgage marketing program. Want to increase your website traffic? Just publish more content onto your site. It’s a numbers game.
  • Accumulation — When we write for our clients, we focus on topics that will draw visitors to the site daily and over a long period of time. These “evergreen” topics never go out of style or become outdated. So the results (website traffic and leads) tend to accumulate over time.
  • Independence — Many mortgage professionals depend on leads delivered by third-party providers, such as Zillow, LendingTree or Bankrate. That’s great, if it works for you. But if you develop your own website traffic and lead generation program, you’ll be less reliant on those third-party leads. You’ll be investing in something you actually own … your mortgage website.
  • Measurability — By using a website analytics program, you can easily measure the results of your blogging / publishing efforts. For instance, you could log into Google Analytics and see which articles are pulling the most traffic, what keywords people are searching to find you, and a lot more.

These are just a few of the benefits a content-based marketing program can deliver. For these and other reasons, it’s one of the best ways to grow your mortgage business in 2020.

Other Ways to Grow Your Business

I’m a bit biased when it comes to mortgage marketing and business development. I specialize in content-based strategies, like blogging and SEO. Using these strategies, I’m able to deliver measurable results for my clients in terms of website traffic, visibility and exposure.

But content marketing certainly isn’t the only way to grow your mortgage business in 2020. Here are some other techniques you might want to consider.

  • Networking / referrals. This is the “bread and butter” for a lot of mortgage professionals, and with good reason. Networking with real estate agents and other industry professionals is a tried-and-true method for generating referrals.
  • Public relations. Sharing your insight with local news outlets is another great way to grow your business. It’s also free. For example, the San Francisco Chronicle runs a segment called “Just Approved” where local mortgage professionals share stories of how they’ve helped borrowers succeed. That’s great exposure!
  • Email newsletters. This is a long-term marketing strategy, but one with a lot of value. Building a newsletter subscription base can help you grow your mortgage business through referrals and repeat business. But you’ll have to go above and beyond to make this work. Forget about stock content and other “fluff.” Your newsletter needs to provide real value to subscribers. For example, maybe it offers the latest mortgage rate trends and local housing market news. That would be useful.
  • YouTube. This is another good way to build your mortgage business online, because it taps into a large audience that already exists. You could post educational videos aimed at home buyers or homeowners in your target area, and plug your services at the end.

Where We Fit Into All of This

I can help you grow your website by developing a detailed and goal-oriented content plan. The primary goal is to publish the kind of content that attracts people to your website (when they conduct relevant searches through Google, Yahoo and Bing).

After learning about your business, I’ll create a list of topics to write / blog about. I’ll use my 15+ years of experience and proprietary data to help you increase your website traffic over time.

It might be just what you need to steadily grow your mortgage business in 2020 and beyond! Contact me with any questions you have.

Portland at night

Portland, Oregon Housing Market: Will It Crash or Climb in 2020?

Will the real estate market in Portland, Oregon crash in 2020? Will home prices drop or rise over the coming months? These are common questions among those planning to purchase a home in Portland. Here is an unbiased, up-to-date housing market assessments to help you decide.

Will the Portland Housing Market Crash In 2020?

To answer this question, we must first understand what a real estate “crash” means. There is no standard definition for a housing crash. Generally speaking, this term refers to a significant and sustained drop in home values. We saw plenty of this during the latter part of the previous decade, when the nation’s housing market collapsed.

Based on that definition, it seems unlikely that the real estate market in Portland, Oregon will crash in 2019 or 2020.

But home prices in the city are definitely dropping, as of fall 2019. According to the real estate information company Zillow, the median home value for Orland dropped by around 2% over the past year. Looking forward, they predict that prices will take continue to decline into the fall of 2020.

In September, the company’s research team wrote:

“Portland home values have declined -2.1% over the past year and Zillow predicts they will fall -2.1% within the next year.”

They have also labeled Portland as a “cool” housing market, which means that current real estate commissions tend to favor buyers more than sellers.

Portland price chart
Chart: Home Value Index for Portland, OR. | Source: Zillow.com.

The chart above, created by Zillow, shows an estimate of the median home price for Portland going back nine years or so. You can see where values declined in the wake of Great Recession (left side), followed by a sharp rise that began in late 2012.

On the right side of the chart, you’ll notice how home prices in Portland have dipped. The company’s forecast is shown in the green shaded area.

Elsewhere in the state, house values are still climbing. The median home price for the state of Oregon rose by around 3% over the past year. Some cities, like Salem and Eugene, have seen even bigger gains.

More of a “Correction” Than a Collapse

As mentioned, home prices in Portland are clearly declining in 2019. And they have been for some time. But that doesn’t necessarily constitute a housing market crash or collapse. It’s more of a “correction.”

Home prices in the Portland, Oregon area skyrocketed over the past six years or so. This was largely due to severe inventory shortages and strong demand from buyers. There were plenty of buyers and investors in the market, but not enough homes to meet demand. That put tremendous upward pressure on prices.

As a result of those conditions, the median home value in Portland rose by nearly $200,000 from 2012 to 2018.

Today, housing affordability has become an issue in the area. It has become increasingly difficult for a “typical” buyer to afford a median-priced home in the Portland real estate market. That, above all else, is why home prices in the area have stalled.

This is a pattern we have seen in many major metro areas over the past few years. Inventory shortages, combined with strong demand, have sent home prices through the roof. This leads to affordability issues, which in turn cause some buyers to shy away from the market. That’s why we are currently seeing price declines in formerly red-hot real estate markets.

But Portland is not having a housing market crash in the classic sense of the term. It is merely a modest decline in home prices following a rapid and unsustainable increase.

Housing Inventory Is Still Tight

Don’t let Zillow’s “cool” market assessment fool you. Real estate inventory remains tight within the Portland area. So buyers are still competing for limited inventory.

According to the national real estate brokerage Redfin, Portland had about a 2.5-month supply of homes for sale as of August 2019. That was slightly below the national average for the same time period, and well below what is considered to be a “balanced” real estate market.

In some ways, the Portland real estate market is a paradox right now. Normally, when a housing market has a low level of supply and faster-than-average home sales, prices would be climbing steadily. But as we have seen, values are actually declining in the Portland area. It’s an unusual time.

Population Growth Has Boosted Housing Demand

The population of Portland, Oregon has increased steadily over the past few years. This should come as no surprise to local residents, who have seen one news story after another about people relocating into the area.

According to the U.S. Census Bureau, Portland’s population increased by 11.9% from 2010 to 2018. That was nearly double the national population growth rate of 6% for that same time. Many of those new residents moved to Portland from more expensive real estate markets, with the specific purpose of finding affordable housing.

A report published earlier this year by the Oregon Employment Department showed that more people have moved into Oregon than left over the past few years. This has increased the demand for housing, among renters and buyers alike.

Our Forecast: A Short Downturn Followed by Rising Prices

Our assessment is that the Portland real estate market is clearly experiencing a downturn in terms of home prices. But it’s not a full-on housing market crash or collapse.

The city and surrounding metro area still have all of the fundamentals for a strong housing market. Supply is limited while demand remains strong. The local economy is in good shape with a favorable employment rate. And the city continues to attract new residents from elsewhere in the country.

Based on these factors, we expect the Portland real estate market to experience a short period of declining prices, after which home values will begin to rise again (more gradually).

Disclaimer: This article contains predictions and forecasts for the Portland housing market, some of which were made by third parties not associated with MetroDepth. Real estate forecasts are the equivalent of an educated guess and should be treated as such.

Dallas city skyline

Will the Dallas, Texas Housing Keep Rising or Crash in 2020?

Will the real estate market in Dallas, Texas keep going up in 2020, as it has been in recent years? Or will there be a housing downturn or “crash” in the coming months?

These questions are top-of-mind for many home buyers in the Dallas-Fort Worth metroplex. Here’s what you should know, as we move into the fall of 2019.

A Housing Market Crash Not Likely for Dallas

Let’s start with the big question: Will the Dallas-area real estate market crash in 2020?

At present, that’s highly unlikely. Home prices across the DFW metro area will probably continue going up through the end of 2019 and into 2020, as they have been for the past few years.

A housing market downturn or crash in Dallas doesn’t seem likely at this stage. What’s more likely is that home prices in the metro area will rise more slowly in 2020 than they did over the past few years. In fact, one recent forecast predicted this very thing.

In September 2019, the housing research team at Zillow wrote:

“Dallas home values have gone up 8.7% over the past year and Zillow predicts they will rise 3.9% within the next year.”

That’s just one of several sources predicting a slowdown in price growth for this real estate market. But it’s not necessarily a “downturn,” so much as a return to normalcy.

If you look at annual home-price appreciation in the U.S. going back several decades (and filter out the anomalies), you’ll see that house values have risen by about 4% annually. That’s a fairly average rate of growth, from a historical standpoint.

In Dallas, prices have been rising at an above-average pace for several years. That kind of trend can eventually create affordability issues for a large segment of the population. So it’s actually good to see a bit of a market cool-down in the Dallas area. It could help prevent a real estate bubble from developing. And a bubble can’t burst if it doesn’t form in the first place.

Dallas at ‘Medium’ Risk of a Downturn in Next Recession

There has been a lot of talk about economic recessions lately. This is largely due to the economic uncertainty surrounding Trump’s trade war with China and global unrest in general.

People read the headlines and they want to know: “What would a recession do to the Dallas real estate market?”

According to one recent study, Dallas is only at “medium” risk of a housing downturn if a recession occurs. That study was conducted by the research team at Redfin. They analyzed real estate conditions in 50 of the nation’s largest metro areas, in order to “identify the local housing markets most likely to feel adverse effects from the next recession.”

To accomplish that, they looked at seven factors relating to local housing and economic conditions, and then assigned each metro area an overall “risk score.” In theory, a higher score means that a local real estate market is more likely to experience a downturn (and price declines) in the next recession. A lower score suggests that a market is less at risk of a downturn.

The Dallas-Fort Worth metro area had a score of 45.9%, which put it near the middle of the “pack” in terms of overall risk. That means it would take a severe recession to shake home prices in the Dallas area — according to this particular study, at least.

The housing markets most at risk of a downturn were Riverside, CA; Phoenix, AZ; and Miami, FL. Those with the lowest risk were all located in New England (Rochester and Buffalo, New York; along with Hartford, Connecticut).

According to Daryl Fairweather, chief economist at Redfin:

“If the U.S. enters a recession in the next two years, it will likely be caused by the global trade war … That could cause declines in home prices in markets whose economy depends on global trade, but home prices nationwide are likely to hold steady.”

The bottom line to all of this is that a housing market downturn or crash in the Dallas-Fort Worth real estate market appears unlikely at this stage. But home prices are expected to rise more slowly next year, following several years of rapid growth.

Home Prices Expected to Continue Going Up, for Now

The chart below, created by Zillow, shows their proprietary “Home Value Index” for the Dallas-Fort Worth-Arlington metropolitan area.

DFW home price chart
Chart: Home Value Index for DFW area. Source: Zillow.com.

A couple of things will jump at you, when looking at this chart. For one thing, you’ll notice how home prices dipped slightly in the wake of the last recession (left side of chart). “Slightly” is the key word in that sentence. The last recession was pretty severe, yet it only caused a modest decline in home prices within the Dallas housing market.

That’s an important point. House values in some U.S. cities and metro areas fell hard and fast during the last recession. (I’m looking at you, Phoenix, Las Vegas, and most of California.) But the major cities in Texas, such as Austin and Dallas, experienced a relatively minor drop in prices by comparison.

You’ll also notice how prices in the area began a steady climb starting in late 2013. In fact, the Home Value Index for this housing market has nearly doubled over the past seven years. That upward trend continues to this day, but to a lesser degree.

Lastly, you can see Zillow’s forecast for the Dallas-Fort Worth real estate market, shown in the green shaded area. As mentioned earlier, they expect the median home price for this area to rise by around 4% over the next year or so.

Summary and Conclusion

We’ve covered a lot in this report. Here’s a recap of the key points:

  • As of now, it seems highly unlikely that the Dallas, Texas housing market will experience a major downturn or crash anytime in the near future.
  • This market will probably continue going up for the foreseeable future.
  • But forecasters are predicting smaller home-price gains in 2020, compared to the past few years.
  • When the next recession comes along, the Dallas real estate market could be at “medium” risk of a downturn. And it would likely be mild compared to some other major cities in the U.S.
  • Will 2020 be a good time to buy a home in the Dallas-Fort Worth area? Most signs point to yes.

Disclaimer: This article contains forecasts relating to home prices and other economic conditions. They are the equivalent of an educated guess and should be treated as such. No one can predict future real estate trends with complete accuracy.