E016: 2020 Market Outlook and New Loan Limits for FHA, Conventional and VA Loans

In this episode, Nicole Saunches discusses the 2020 Real Estate Market Outlook with Chris Musto from Guaranteed Rate.  

Many people are approaching this year anticipating a recession, however, times have changed and there are quite a few differences between the years that led up to 2008 and the real estate crash and today that may ease these concerns.

• At the end of 2019, the U.S. jobless claims were at a 50-year low.  And, we're seeing the same in Florida.  A recent article in the Tampa Bay Times reported that the state's unemployment rate dropped to a record-low 3% (the lowest since record-keeping began in 1976).
• Stricter lending standards reduct the likelihood of borrowers defaulting on their mortgages
• Nationwide, it appears that homeowners are more cautious choosing to retain equity in their homes instead of borrowing against them
• Subprime, portfolio and nonprime loans only made up a small percentage of loans (compared to ~20% in 2005)
• State forecasters estimate that Florida is gaining 906 residents daily

Below are the new loan limits for Pinellas County:

• FHA - $331,760 for a single-family home; $424,800 for a duplex; $513,450 for a triplex and $638,100 for a quad
• Conventional/Conforming - $510,400

Below are the 12/2019 Pinellas County stats referenced:

• Combined Closed Sales (single-family homes &  condos/townhomes): 12/2019 - 1,928 sales (up 11.3% over 12/2018); 12/2018 - 1,733 sales; 12/2017 - 1,891 sales; 12/2016 - 1,875 sales
• Closed Sales for single-family homes: 12/2019 - 1,242 sales (up 19.5% over 12/2018; 12/2018 - 1,039 sales; 12/2017 - 1,137 sales;  12/2016 - 1,188 sales
• Closed Sales for condos/townhomes:  12/2019 - 686 sales (down 1.2% from 12/2018); 12/2018 - 694 sales; 12/2017 - 754 sales; 12/2016 - 687 sales

• Combined  New Listings - 12/2019 - 1,459 units (down 15.4% from 12/2018); 12/2018 - 1,724 units; 12/2017 - 1,581 units; 12/2016 - 1,675 units
• New Listings (single-family homes) -  12/2019 - 914 units; 12/2018 - 908 units; 12/2017 - 935 units; 12/2016 - 995 units
• New Listings (condos/townhomes) - 12/2019 - 545 units; 12/2018 - 816 units; 12/2017 - 646 units;  12/2016 - 680 units

• Inventory (combined active listings for single-family homes & condo/townhomes): 12/2019 - 4.580 units (down 21.4% from 12/2018);  12/2018 - 5,828 units; 12/2017 - 4,970 units; 12/2016 - 5,728 units
• Single-Family Inventory: 12/2019 - 2,556 units (down 23.1% from 12/2018);  12/2018 - 3,322 units;  12/2017 - 2,890 units; 12/2016 - 3,288 units
• Condo/Townhome Inventory: 12/2019 - 2,024 units (down 19.2% from 12/2018); 12/2018 - 2.506 units; 12/2017 - 2,080 units; 12/2016 - 2,440 units

• Median Price for single-family home: 12/2019 - $271,000 (up 8.4% over 12/2018); 12/2018 - $249,000; 12/2017 - $239,900; December 2016 - $222,250
• Median Price for condos/townhomes: 12/2019 - $188,500 (up 1.9% over 12/2018); 12/2018 - $185,000, 12/2017 - $162,000; December 2016 - $142,000

• Average Sales price for single-family homes: 12/2019 - $356,003 (up 8.9% over 12/2018); 12/2018 - $326,789; 12/2017 - $303,016; 12/2016 - $276,945
• Average Sales price for condo/townhomes: 12/2019 - $260,713 (down 14.3% from 12/2018); 12/2018 - $304,056; 12/2017 - $240,497; 12/2016 - $215,214

• Months supply of inventory for single-family homes: 12/2019 - 2.3 mos (down 23.3% from 12/2018); 12/2018 - 3 mos; 12/2017 - 2.5 mos; 12/16 - 2.8 mos
• Months supply of inventory for condos/townhomes: 2.7 mos (down 18.2% from 12/2018); 12/2018 - 3.3 mos; 12/2017 - 2.7 mos; 2016 - 3.4 mos