Will Home Values Appreciate or Depreciate in 2020?

With the housing market staggered to some degree by the health crisis the country is currently facing, some potential purchasers are questioning whether home values will be impacted. The price of any item is determined by supply as well as the market’s demand for that item.

Each month the National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS Confidence Index.

Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.

 

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”

 

Will Home Values Appreciate or Depreciate in 2020? | MyKCM

 

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.

Seller Supply

The index also asks: “How would you rate seller traffic in your area?”

 

Will Home Values Appreciate or Depreciate in 2020? | MyKCM

 

As the map above indicates, 46 states and Washington, D.C. reported ‘weak’ seller traffic, 3 states reported ‘stable’ seller traffic, and 1 state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the needs of buyers looking for homes right now.

 

With demand still stronger than supply, home values should not depreciate.

 

What are the experts saying?

 

Here are the thoughts of three industry experts on the subject:

 

Ivy Zelman:

“We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.”

Mark Fleming, Chief Economist, First American:

“Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”

Freddie Mac:

“Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.”

Bottom Line

Looking at these maps and listening to the experts, it seems that prices will remain stable throughout 2020. If you’re thinking about listing your home, let’s connect to discuss how you can capitalize on the somewhat surprising demand in the market now.

 

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Published by Amber Askew

Born and raised in Huntsville, Alabama and never want to move. My husband is my everything. I have two teen girls and one step daughter who’s in college. I have two full time jobs. I’m in customer service and I’m also a Realtor. I may not want to move but I absolutely love to travel. I love wine, coffee, and eating out. Who ever invented Netflix deserves a Nobel prize. My main guilty pleasure is the Bachelor/Bachelorette series on ABC. I’m totally obsessed with Greys Anatomy. Sorry not sorry. Most of my shopping is on Amazon Prime. I’m not that heavy into fashion. If it looks good then I like it. However I do love to look at fashion. I’m obsessed with the Royals. Almost anything involving England I love it! It’s borderline crazy.

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