If you’re looking to buy or sell a house, chances are you’ve heard talk about today’srising home prices. And while this increase in home values is great news for sellers, you may be wondering what the future holds. Will prices continue to rise with time, or should you expect them to fall?
To answer that question, let’s first understand a few terms you may be hearing right now.
It’s important to note home prices have increased, orappreciated, for114straight months. To find out if that trend may continue, look to the experts.Pulsenomicssurveyed over 100 economists, investment strategists, and housing market analysts asking for their five-year projections. In terms of what lies ahead, experts say the market may see some slightdeceleration, but notdepreciation.
Here’s the forecast for the next few years:As the graph above shows, prices are expected tocontinue to rise, just not at the same pace we’ve seen over the last year.Over 100 experts agree, there is no expectation for price depreciation. As the arrows indicate, each number is an increase, which means prices will rise each year.
Bill McBride, author of the blogCalculated Risk, also expectsdeceleration,but not depreciation:
“My sense is the Case-Shiller National annual growth rate of 19.7% is probably close to a peak, and that year-over-yearprice increases will slow later this year.”
“. . . annualprice increases will slowto a more normal level, . . .”
What Does This Deceleration Mean for You?
What experts are projecting for the years ahead is more in line with the historical norm for appreciation. According to data fromBlack Knight, the average annual appreciation from 1995-2020 is 4.1%. As you can see from the chart above, the expert forecasts are closer to that pace, which means you should see appreciation at a level that’s aligned with a more normal year.
If you’re a buyer, don’t expect a sudden or drastic drop in home prices – experts say it won’t happen. Instead, think about your homeownership goals and consider purchasing a home before prices rise further.
If you’re a seller, the continued home price appreciation is good news for the value of your house. Work with an agent to list your house for theright pricebased on market conditions.
Experts expect pricedeceleration, not pricedepreciationover the coming years. Let’s connect to talk through what’s happening in the housing market today, where things are headed, and what it means for you.
Author:Brian Woodhead -Skyline Team Leader Phone: 602-369-0671 Dated: October 19th 2021 Views: 17 About Brian Woodhead: Realtor Designation
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