Millennials and baby boomers are at opposite ends of the generational spectrum. How do their needs shape current real estate trends? Here’s a look at how the market is shaping up for 2020.

Inventory Shortage Continues

Last year’s drop in interest rates created a fierce demand that resulted in tightening available inventory. This year, as the largest group of millennials turns 30, many of them are expected to buy their first home. Add to that the fact that a number of baby boomers are choosing to stay in their current homes longer, and the housing market will continue to run short on inventory.

Tough Times for Landlords

Thanks to rent control measures enacted last year in New York and California, average investment in multi-family properties has already begun to decline. In addition, home prices continue to rise in traditional spots like NYC, Los Angeles and San Francisco as well as new hotspots in real estate trends such as Seattle, Portland and Nashville. As a result, it’s become extremely difficult to break into home ownership. 

Demand for Starter Homes Rises

As effects of the Great Recession continue to fade, millennials are in a better financial position to buy their first home and start a family. But they’re also competing with baby boomers, who are looking to downsize as their families leave the nest. Builders will take advantage by focusing on development of starter homes.

Home Price Growth Slows Down

Workers are migrating to major urban areas, which are experiencing the bulk of job growth. Rising real estate prices in those spots will be forced to slow down until wages reach a level that can once again support them. 

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