Buying a home is one of the biggest financial decisions most people make. After a decade-long increase in housing prices after the Great Recession, there are at least some views that the housing market will continue to slow. The good news for the nation as a whole is that the overall pricing trends are expected to remain marginally positive in 2020. The bad news is that home prices in many cities are expected to fall next year, and many cities also are projected to see the number of homes being purchased and sold drop as well.

A look through the 2020 Housing Market Predictions outlook from Realtor.com reveals that many of the 100 or so largest housing markets by city are set to see either lower total home sales or price drops in 2020. The official call is for nationwide total home sales to be down 1.8% in 2010, with a mere 0.8% average price gain. Where things get very challenging is that 16 of these major markets, many of which also took a hit during the Great Recession, are expected to see a drop in both total sales and in the average selling price.

Realtor.com expects mortgage rates to remain low at 3.85% on average in 2020, while a lack of supply in the affordable and entry-level homes is expected to continue. It also turns out that high prices finally may have cured high prices for many cities. Realtor.com indicated that buyers were “just over-overpaying” for homes and that the housing market has finally “hit the ceiling of crazy price growth.” The economy is likely to contribute to that softness, but those endless media predictions of an imminent recession are now just distant memory, with 2% GDP growth forecast and with a historically very low 3.9% unemployment rate (versus 3.6% in 2019). Hiring trends are still positive but slower in the 2020 forecast, and consumer confidence is looking lower, while inflation is expected to continue muddling along at about 2%.

One big issue to contend with is a continued expectation for buyers to migrate to better markets for affordability. Realtor.com noted that housing is still years away from reaching an adequate supply of homes to meet today’s demand from buyers, and demand remains high, with younger buyers dominating as millennials are expected to be the majority of home buyers. Another contributing factor to lower existing homes being sold ahead is a continued supply shortage, along with a flattening in price growth. Cities in Arizona, Nevada and Texas are expected to continue to benefit from shoppers looking for more affordable alternatives to California. Those who would have been homebuyers in the expensive Northeast markets are expected to find more diversified economies and warmer options in the Carolinas, Georgia and Florida.

In the data on a city-by-city comparison, 16 cities that are expected to have both negative sales trends and negative pricing trends stand out. After all, with many being some of the same cities that were hit hard heading into and through the Great Recession, it may leave some buyers worried that some of these markets are already ahead of themselves. Also, with the 2020 election wild card, it could leave some homebuyers more reluctant to pull the trigger and buy a home. Here are the 16 major housing markets projected to see a drop in total sales and also a drop in the average sales price:

Housing Market	Sales Growth	Price Growth
Austin-Round Rock, Texas	−2.8%	−0.2%
Bakersfield, Calif.	−0.3%	−1.4%
Baltimore-Columbia-Towson, Md.	−0.1%	−0.3%
Birmingham-Hoover, Ala.	−1.3%	−1.1%
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.	−0.9%	−0.3%
Dallas-Fort Worth-Arlington, Texas	−4.9%	−0.5%
Detroit-Warren-Dearborn, Mich.	−4.1%	−1.0%
Fresno, Calif.	−0.7%	−0.9%
Jackson, Miss.	−2.1%	−0.1%
Las Vegas-Henderson-Paradise, Nev.	−9.5%	−1.1%
Miami-Fort Lauderdale-West Palm Beach, Fla.	−1.1%	−1.2%
New Orleans-Metairie, La.	−2.3%	−0.7%
Oklahoma City, Okla.	−1.4%	−0.8%
San Francisco-Oakland-Hayward, Calif.	−4.5%	−0.4%
Scranton-Wilkes-Barre-Hazleton, Pa.	−2.7%	−3.2%
Worcester, Mass.-Conn.	−0.4%	−0.6%

Realtor.com offered the following forecast for what it will be like to be a seller of a home in 2020:

Sellers in 2020 will contend with flattening price growth and slowing activity, requiring more patience and a thoughtful approach to pricing. Sellers of homes priced for entry-level buyers can expect the market to remain competitive and prices to stay firm. At the upper end of the price range, however, properties will take longer to sell, and incentives will be needed to close deals. As the market moves toward a more balanced scenario, sellers who adjust to local market conditions can expect to benefit from continuing demand.

While there is continued caution in some markets, on top of the most expensive zip codes to buy homes in, there also are cities from the same data that are expected to see the largest gains in overall home sales.

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