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? Here’s a look at what several industry-leading experts have to say.
“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market…Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”
“Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures…Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.”
Bottom LineMany 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 Market are going to be key data to track.
The map below was created after asking the question: “How would you rate buyer traffic in your area?”
The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand.
The index also asks: “How would you rate seller traffic in your area?”
The one obstacle, though, let’s talk about that. 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 because home has grown, the value of home has grown over the pandemic. 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.”
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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