Hello and welcome to the real estate minute. I’m your host Ivan Estrada with Ivan Estrada properties at Douglas Elliman. And in this month for the month of February we’re going to be discussing the 2020 projections for the State of California, the rental market, and also how the baby boomers are going to be changing the real estate floor plan for the next decade. So the real estate minute is going to work like this: there are three segments, one minute each, three minutes total. Let the real estate minute begin.
Baby Boomers will be changing the real estate floor plan for the year of 2020 and presumably for the next 10 years. Now who are these baby boomers? Well, they were born between the years of 1946 and 1964 in a time of a lot of economic growth, affluence, and also the purchasing of a lot of large homes. Baby Boomers will either be downsizing or going back into the rental market. Some of the challenges that baby boomers will face will be who will be buying their homes? Baby Boomers were very lavish. They like lots of bedrooms, big spaces, big yards. And Millennials who will be buying these homes like the least amount of bedrooms, less space, minimalistic. They want to spend more of their income on experiences and travel than in a large home. So it will be very interesting on how it will play out in 2020 to 2030.
The rental market is expected to increase in areas such as Los Angeles, Dallas Fort Worth, Houston, DC, Atlanta, and New York for the years of 2020. Now, why are they increasing? Well Millennials are making a huge part of this demand. Now, why are they renting instead of buying? Well, there’s a lot of reasons. First one is down payment. Down payment of 20%-25% is too large for many Millennials. And so they’re renting instead of buying. Well, what does this mean for investors? Well, if you’re an investor and looking for a duplex, triplex, a four-plex, or a large apartment building, it’s a great time to get into the market and invest. For many Millennials owning a home is still the American dream, but for the moment, The American Dream deferred due to student debt, lack of equity, and also lack of inventory.
The California real estate market is projected to grow by two and a half percent in 2020 in comparison to 2019’s 4.2%. Now this is a regular real estate market. Many of us were used to a market that was a normal of getting increases of 8 to 10% in certain areas and California. Now keep this in mind. Why do we live in California? Well, you could be at the beach, the mountains, or the desert all within the same day. Tight inventory and flat price has headlined realtor.com 2020s housing forecast. They think the biggest surprise from the forecast is how long the market is staying in the slow inventory environment, especially as Millennials are in the major home-buying phase. Now with the decrease of interest rates in 2019 and hopefully some more in 2020, this will see some economic growth in the real estate sector.
Thank you so much for watching this month’s real estate minute for the month of February on the 2020 housing forecast for the State of California. I’m Ivan Estrada with Ivan Estrada Properties at Douglas Elliman. I will see you next month and don’t forget to follow me on social media.
About Ivan Estrada Properties: Ivan Estrada and his elite team of real estate agents are dedicated to providing an unforgettable experience in finding your dream home in Beverly Hills and other areas in Los Angeles County. Call us today at 323.574.2317 or contact us here.