Many people worry if property prices will drop this year. Whether you're a prospective buyer, seller, or both, the answer to this question is critical. Let's take a look at what's going on with home prices, where experts predict they'll go, and how this affects your homeownership plans.
What is the State of Home Prices?
There have been 121 months of year-over-year gains in home prices. According to CoreLogic:
“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”
So, why are prices so high right now? The reason behind this is that there are more buyers than available properties. Because homes for sale are a hot commodity in today's low-inventory housing market, this mismatch is projected to keep the upward pressure on home prices going.
What Will Prices Do Next, According to Experts?
Due to the continuous supply and demand imbalance, experts believe the housing market is not poised for a price decrease.
While analysts predict a more moderate price increase this year, estimates for 2022 imply that price increases will continue to be robust. According to First American:
“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”
How Does This Affect You?
The most important point is that none of the experts expect depreciation to occur. If you're considering selling your home, the increased price appreciation over the last two years has been fantastic for the value of your home, but it's also something you should consider when making your next move. If you're planning to buy a house after selling your current one, don't wait for prices to drop. Waiting will only cost you more money in the long term, as rising mortgage rates and housing prices will affect your next home purchase. According to Freddie Mac:
“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”
You should not wait for prices to decrease before you start selling. Prices are expected to rise this year, according to experts. That means that, if you're ready, buying your next house before prices rise further may be the best financial decision you can make. Work with a real estate professional to start the process of selling your existing house and finding a new one before prices climb. Send me an email today!