Here's what's next for housing

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Here's what's next for housing

By Andy Carlo - 10/21/2019
COLORADO SPRINGS - While the housing market is on “solid ground,” real estate expert John Burns has forecast flat single-family growth for 2019 and a 5% decline for 2020.

Burns, the CEO of John Burns Real Estate Consulting, delivered his predictions at the final day of the 2019 ProDealer Industry Summit held here at the Broadmoor hotel.

During his housing seminar, Burns also forecast a 10% decline in multifamily construction due to less capital being devoted to the highly volatile apartment sector.

For the repair and remodel market, Burns said he estimates growth of 1.8% next year with “big project” remodeling growing 4.8% for all of 2019 but falling 0.2% in 2020 due largely to slowing home price appreciation. Small projects, such as plumbing, will grow 5.7% this year and 5% next year due to strong real income growth among homeowners.

But Burns also expects the economy to hit a recession toward the end of 2020 or early in 2021. He noted that many of his clients are not actually budgeting for a recession next year, but they are balancing their books with a recession in mind.

“If we have a recession it will feel like the 2001 recession, which we got through just fine,” Burns noted.

Regarding trends in the housing market, Burns pointed toward the growth of multigenerational housing along with new built-to-rent homes.

Companies leading the purpose-built rental housing including American Home 4 Rent and Redwood Communities. These built-for-rent homes are also taking away customers who might have moved into an apartment but are instead opting for small rental homes and more privacy.

“It’s going to be a game-changer,” he said.

Burns also said home buyers are shifting toward smaller, more efficient homes that are closer to mature neighborhoods where the occupants are closer to schools and their jobs.

On the home building side, Burns expects more homes to be built offsite with better technology as offsite framing continues to surge in popularity among builders.

Land development, however, is hindering home growth due partly to developers being burdened by excessive fees from local municipalities.