Will Home Prices Fall This Year?
Many people are wondering will home prices fall this year? Whether you're a potential home buyer, seller, or both, the answer to this question matters for you. Hey, it's Andy Mandel with the Mandel Team at RE/MAX. And in this video, we're gonna break down what's happening with home prices, where experts say they're headed, and how this impacts your home ownership goals.
Home prices have been going up since they bottomed out in 2011. In fact, we've seen 121 consecutive months of year over year increases. In 2021, they went up about 24% compared to 2020 in our area here in South Florida. So, why are prices climbing so much? It's because there are more buyers than there are homes for sale. Even before the pandemic induced craziness, we were already in a seller's market. In 2019, there was about three and a half months of inventory. Since the pandemic, you've been between half of a month to just over one month of inventory. This imbalance is expected to maintain that upward pressure on home prices because homes are a hot commodity today.
Experts say, the housing market isn't set up for a price decline due to the ongoing imbalance between supply and demand. If you take a look at this graph, you'll see the latest home price forecast for 2022 that are calling for ongoing appreciation throughout the year. As you can see, these projections are much lower than they were in 2021 which is great news for buyers as we're getting closer to a slower and more normal rate of appreciation. Typically, homes appreciate around 4% per year.
So, what does this mean for you? The biggest takeaway is that none of the experts are predicting prices to fall. If you're a homeowner thinking about selling the pace of appreciation and the number of offers each listing is receiving is starting to slow. And with that, the terms that the sellers are able to receive will likely be slightly less favorable as the year goes on. As interest rates and home prices continue to rise, waiting will only cost you more in the long run and have an impact on your next home purchase. Bottom line. If you're thinking about selling to a move up to a bigger house, you're better off acting sooner than waiting until next year. Let's connect, begin the process of selling your current home and looking for your next one for prices and interest rates rise higher.