Whether you’re a potential home buyer, seller, or both, you probably want to know, will home prices fall this year? Let's breakdown what's happening with home prices where experts say they're headed and why this matters for your home ownership goals.
Last year's rapid home price appreciation wasn't the norm. In 2021, home prices appreciated quickly because of a record low mortgage rate that motivated more buyers to enter the market. As a result, there were more people looking to make a move than there were homes available for sale. This led to competitive bidding wars which drove prices up typically in South Florida where home prices appreciate around 4% per year historically.
In 2021, they went up on average about 24% that goes to show you that 2021 was an anomaly in the housing market spurred by more buyers than homes for sale.
This year, home appreciation is slowing from the crazy pace we saw over the past two years. According to the latest forecast experts say on average, nationwide prices will still appreciate by roughly 10% in 2022. Why do all these experts agree that prices will continue to rise? It’s simple. Even though housing supply is growing, it’s still overall low, thanks to several factors including a long period of under building homes by home builders the experts say that’s gonna help keep upward pressure on home prices this year.
As the market undergoes this change, it’s true price appreciation will not match the crazy pace we saw in 2021, but the rapid appreciation the market saw last year wasn’t sustainable anyway.
Today, the market’s beginning to move back towards pre-pandemic levels, but even the forecast for 10% home price appreciation in 2022 is way higher than the 4% that’s more typical for a normal market. So despite what you may have heard, experts say most prices won’t fall in most markets, they’ll just appreciate more moderately. If you’re worried the home you are trying to sell, or the home you want to buy will decrease in value, you should know experts aren’t calling for depreciation in most markets, it just won’t appreciate in value as fast.
Bottomline, if you’re thinking about making a move, you shouldn’t wait for the prices to fall especially here in South Florida where everyone is still moving. Experts say prices will continue to appreciate this year, just in a more moderate pace. When you’re ready to begin the process of buying or selling.
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Posted by Andy Mandel on