Flipping America 319, Predictions for 2020

podcast 319 real estate predictions for 2020

Here comes the 2020 Prediction show. 2019 has been interesting and it’s hard to believe it’s already over, but it’s time for us to pull the cover off our crystal ball and share with you what we see coming in 2020. We do that today with my TOP TEN Real Estate Investing predictions for 2020. 

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  • We normally meet every Wednesday and Thursday but we are done for the holidays. No meetings in December. 
  • Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
  • Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.  


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Topic: The Prediction Show!

Recap: The Big Stories of 2019

  1. SALT deduction above 10k affects sales of expensive properties
  2. Luxury market already losing speed – getting back to normal.
  3. Sub-luxury still hot. Lack of inventory, strong resales. 
  4. Chronic shortage of new housing starts, especially in starter home category.
  5. iBuyers make a splash.
  6. Class-Action Suit against the NAR. (the story that wasn’t. Almost no impact in brokers’ daily lives)
  7. Rent controls. Oregon and California. U.S. next?
  8. House Flipping at an all time high in 2018 (10% of all homes sold). Back down to around 5% in 2019. House Flipping profits are at a 10 year low.
  9. Zillow is about to become the Google of real estate. If they ever turn an actual profit, watch out!
  10. Smart home technology comes of age.

2020 Predictions

  1. Housing inventory shortage will continue, particularly in starter home class.
    1. Hopeful signs: New home permits up in the 4th quarter 2019.
  2. Millennials and now older Gen Z’s will buy homes, keeping housing market stable
  3. Coastal markets will see flattening of prices, reductions in LA, San Fran, Seattle, NYC, Miami, Boston
  4. Looming government interference
    1. Wholesaling in Illinois. Jan 1, wholesalers must be licensed realtors. 
    2. Rent controls
      1. Oregon and California, now New York
      2. Illinois
      3. Nationwide?
    3. Forced shelter for homeless in new construction – Portland. 
  5. Interest rates to remain low, may see all-time low mortgage rates.
  6. No housing crisis in the next six months. Low probability of housing crisis in the next two years.
    1. Lending guidelines remain tight
    2. Default and foreclosure rates remain at all-time low rates. 
    3. Low inventory gives no incentives to loosen lending guidelines. 
  7. Nationwide, prices will tend toward on pace with inflation – 2.8-3.2%
    1. Exceptional markets down – aformentioned coastal areas plus Chicago, St. Louis and Kansas City. down 1-3%. 
    2. Exceptional markets up – 3.5-4% gains
      1. Billings and Missoula, MT, 
      2. Sioux Falls and Rapid City, 
      3. SD Tampa, FL, 
      4. Memphis, 
      5. Raleigh-Durham, NC, 
      6. Mobile, AL, 
      7. Huntsville, AL, 
      8. Columbus, GA
      9. Chattanooga, TN
      10. Tuscon, AZ
  8. House flipping markets will become more efficient in major cities.
    1. Lower profits
    2. Weeding out process – many will leave the business altogether. 
  9. Alternative small investor strategies will catch fire in 2020.
    1. AirBnB
    2. Self-Storage
    3. Seller Financing Inexpensive Houses
  10. Overall Housing market will resume its rightful position in the economy – a relatively minor player. 
  11. Retail brick and mortar will struggle. Increased vacancies and store closures.
  12. iBuyers will all raise new money and increase areas of operations. None will turn a profit. 
  13. If Trump is re-elected, Fannie Mae and Freddie Mac will announce plans to go private with an IPO in 2021.
  14. Private solutions for affordable housing will begin to make headlines. According to the Economic Innovation Group (EIG), “as of October 2, 2019, 115 listed funds have identified affordable and workforce housing, as well as community revitalization, among their investment priorities—a nearly four-fold increase since the beginning of 2019.” Most of these developments are focused on providing affordable housing for wage earners who make around 40% to 70% of the area median income.
  15. Opportunity Zone investments will lessen in 2020, but it won’t be over. the best OZ deals may be found in 2020.

Comment Line calls and Questions

Call 404-369-1018, press 1 and leave your message! 

Motivational Thoughts for the day

  • “Often out of periods of losing come the greatest strivings toward a new winning streak.” – Mr. Rogers

Expected Air Date: Monday 12/23/19

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