As shelter-in-place orders were implemented earlier this
year, many questioned what the shutdown would mean to the real estate market.
Specifically, there was concern about home values. After years of rising home
prices, would 2020 be the year this appreciation trend would come to a
screeching halt? Even worse, would home values begin to depreciate?
Original forecasts modeled this uncertainty, and they ranged
anywhere from home values gaining 3% (Zelman & Associates) to home values
depreciating by more than 6% (CoreLogic).
However, as the year unfolded, it became clear that there
would be little negative impact on the housing market. As Mark Fleming, Chief
Economist at First American, recently revealed:
“The only major industry to display immunity to the
economic impacts of the coronavirus is the housing market.”
Have prices continued to appreciate so far this year?
Last week, the Federal Housing Finance Agency (FHFA)
released its latest Home Price Index. The report showed home prices actually
rose 6.5% from the same time last year. FHFA also noted that price appreciation
accelerated to record levels over the summer months:
“Between May & July 2020, national prices increased
by over 2%, which represents the largest two-month price increase observed
since the start of the index in 1991.”
What are the experts forecasting for home prices going
Below is a graph of home price projections for the next
year. Since the market has changed dramatically over the last few months, this
graph shows forecasts that have been published since September 1st.
The numbers show that home values have weathered the storm
of the pandemic. Let’s connect if you want to know what your home is currently
worth and how that may enable you to make a move this year.