Experts Mixed Review on Home Prices
It is a reality we need to come to grips with. The global pandemic and the resulting economic downturns have no doubt made a huge impact on the nation. It is understandably difficult for consumers to predict what they should do. It is not difficult to reason how challenging it must be to forecast home prices.
Normally this is not a difficult assignment. There is a simple formula that determines the future price of any home by calculating the supply of at home in ratio to the demand. In today's market is not so simple.
Demand far exceeds supply. Mortgage applications to buy a home just rose to the highest level in 11 years while inventory of homes for sale is at, or at least very near an all-time low. That would usually indicate strong appreciation for home values as we move throughout the year.
Some experts, however, are not convinced the current rush of purchasers is sustainable. Ralph McLaughlin, Chief Economist at Haus, explained in their June 2020 Housing Market Forecast why there is concern:
“The upswing that we’ll see this summer is a result of pent-up demand from homebuyers and supply-in-progress from homebuilders that has simply been pushed off a few months. However, after this pent-up demand goes away, the true economic scarring due to the pandemic will begin to affect the housing market as the tide of pent-up demand goes out.”
The virus and other challenges currently impacting the industry have created a wide range of thoughts regarding the future of home prices. Here’s a list of analysts and their projections, from the lowest depreciation to the highest appreciation:
- CoreLogic: Year-Over-Year decline of -1.5%
- Haus: Year-Over-Year decline of -1%
- Zillow: Year-Over-Year change is forecasted to bottom out at -0.7%.
- Home Price Expectation Survey: Decline of -0.3% in 2020
- Fannie Mae: Increase of 0.4% in 2020
- Freddie Mac: Increase of 2.3% in 2020
- Zelman & Associates: Increase of 3.0% in 2020
- National Association of Realtors: Increase of 3.8% in 2020
- Mortgage Bankers Association: Increase of 4.0% in 2020
A quick review of this list makes it apparent that while there is no real consensus among experts on this topic, none of our experts foresee a crash similar to what we saw in 2008. We think that is an important consideration. Whether you’re thinking of buying a home or selling your house, you can have some confidence that home prices will not change dramatically this year, even with all of the uncertainty we’ve faced in 2020.
Oly Pen Real Estate has a team of trusted real estate professionals to help you navigate changes in our industry. We have a watchful eye on Grays Harbor market so give your Oly Pen Real Estate Team a call today at 360.249.8187 or stop by our office 141 S. Main Street in friendly Montesano, WA and discuss your expectations today!