Corken + Company values keeping our clients informed on the changes happening in the real estate market.
If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising 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.
Appreciation is an increase in the value of an asset.
Depreciation is a decrease in the value of an asset.
Deceleration is when something happens at a slower pace.
It’s important to note home prices have increased, or appreciated, for 114 straight months. To find out if that trend may continue, look to the experts. Pulsenomics surveyed 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 slight deceleration, but not depreciation.
Here’s the forecast for the next few years:
Prices are expected to continue 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.
What Does This Deceleration Mean for You?
What experts are predicting for the years ahead is more in line with the historical norm for appreciation. According to data from Black Knight, the average annual appreciation from 1995-2020 is 4.1%. 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 the right price based on market conditions.
Experts expect price deceleration, not price depreciation over the coming years. Talk to one of our agents to understand what’s happening in the housing market today, where things are headed, and what it means for you.