What Are the Experts Saying About Future Home Prices?

A worldwide pandemic and an economic recession have had a tremendous effect on the nation. The uncertainty brought about by both has made predicting consumer behavior nearly impossible. For that reason, forecasting home prices has become extremely difficult.

Normally, there’s a simple formula to determine the future price of any item: calculate the supply of that item in ratio to the demand for that item. In housing right now, 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 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 Hausing 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

We can garner two important points from this list:

  1. There is no real consensus among the experts.

  2. No one projects prices to crash like they did in 2008.

Bottom Line

Whether you’re thinking of buying a home or selling your house, know that home prices will not change dramatically this year, even with all of the uncertainty we’ve faced in 2020.

0 views

TO CONTACT MIKE 

PLEASE CALL OR EMAIL:

CalBRE# 01745484

Tel: 760-808-5995

Email: mike@desertcitieshome.com

Fax: (760) 867-2223

  • Instagram - White Circle
  • Facebook - White Circle
  • YouTube - White Circle
  • LinkedIn - White Circle

ALTERNATIVELY YOU CAN FILL

IN THE FOLLOWING CONTACT FORM:

Location:

71691 Highway 111

Rancho Mirage Ca, 92270