What Are Experts Saying about Home Prices?
The 2020 housing market has surpassed all expectations and continues to drive the nation’s economic recovery. The question is, will this positive trend continue throughout the rest of the year, especially given the uncertainty around the current health crisis, the upcoming election, and more?
We’ve seen a steady uptick Year-Over-Year in home prices.
We will need to continue to watch what the Economist says about the market as well as verifying the numbers against sold data moving forward in 2021.
Many economists are in unison, indicating the housing market will continue to fuel the economy through the end of the year, maintaining this unprecedented strength.
Key Factors to Watch
Buyer Traffic, Buyer Demand, Supply of Homes on the Market are going to be key data to track.
The darker the blue, the stronger the demand for homes is in that area. The Realtor Confidence Index from NAR (National Association of Realtors) shows that in most of the U.S. is moderately Strong to Very Strong.
The 2020 foot traffic was lower than in 2019 not because we don’t have buyers wanting to purchase homes. We have an inventory problem, therefore less traffic. Future buyer traffic should continue to be strong moving into 2021 due to low-interest rates. Hopefully, we will see an increase in inventory.
The index also asks: “How would you rate seller traffic in your area?”
We’ve had one huge obstacle in 2020. The obstacle that could be the impediment to our growth in housing, really the recovery, is the lack of available inventory. We’re at a severe shortage across the country in the number of available homes for the number of people wanting them. Interesting quote here from realtor.com, “Since the beginning of the COVID pandemic in March, nearly 400,000 fewer homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory. As a result, home prices are accelerating at double last year’s pace.”
We’ve provided details for you in our report “Know the Market You’re In”. The location, price range, and Month supply on market will determine which way the scales are tipping…..Buyers or Sellers. Keep in mind, Marketing Techniques will determine how much money you keep. Influence = MORE 💰
So, what does the future hold for interest rate moving into 2021. Fortunately for buyers, looks like more of the same. Very low rates!
Overall, we will still see shortages in homes and multiple offers moving into 2021. It is still a sellers’ market and the higher the price you go is where you start seeing a slowdown of sales and prices. With mortgage rates being so low, it is allowing buyers to buy up or get into the market for the 1st time.
Future Home Values
A big challenge facing the housing industry is determining what impact the current pandemic may have on future home values. Of course, Buyers are hoping for major price reductions because of the health crisis straining the economy. And with low interest rates, their hoping to cash in like the “Crash of 08”.
The price of any item, however, is determined by Supply and Demand. Supply is how many items are available in relation to how many consumers want to buy that item. Look at food prices. For example, we are running low in meat and eggs due to production. Now we are seeing in increase in price.
In residential real estate, I measure Supply and Demand based on months supply of inventory. A normal market would have 4-6 months of inventory. We consider anything over seven months would be considered a buyers’ market. Unfortunely, we see prices going down. Anything under 4 months would indicate a sellers’ market, which would put upward pressure on prices.
So Make sure you visit 🏡 Know the Market You’re In 🏡 , find you City then review by Price Range if you looking for your Month Supply on Market or Average Sale Price. 👇👇👇
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