WHERE ARE HOME PRICES HEADED?
If you’re one of the many buyers who have been on the fence about buying because you were hoping prices would soften, allowing you to score a “deal” … you’ve probably been disappointed by the continued rise in prices!
Last month, a number of real estate analytics firms came out with their 12-month projections for home appreciation.
Of the nine analyzing groups, six are projecting price increases, and three are projecting slight decreases in year-over-year home prices.
Take a look:
Even CoreLogic, the company with the most dire of (unlikely) predictions, estimates a drop in prices of only 6-7%.
Determining the future price of something is actually fairly simple, and it comes back to basic supply and demand economics.
Right now, the demand for housing substantially outstrips the supply of homes available. Building costs are up and builder confidence is down.
In fact, nationally home inventory is down a whopping 31% over last year. Typically, that would lead analysts to assume substantial appreciation. However, the situation with COVID-19 is a bit of a wild card, which may be why price appreciation estimates are more modest.
Bear in mind these are national estimates. As you may have heard me say before, real estate is composed of many small “micro-markets” based on geography. If you want to know what might happen in the primary markets I serve –Kent, Covington, Auburn, Maple Valley, Federal Way and Renton – let’s talk. I’d love to share my insights with you!
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