Home Prices Forecasted to Keep Increasing
As we are well into Q4 of 2020 and the end of the year is within sight, some people have questioned how this year’s events would affect home prices. For many years now we have witnessed a steady increase in prices and regardless of all that has occured this year we can look at the big picture of supply and demand to provide the most accurate indication of what to expect.
Currently a lack of many homes on the market for sale persists which is forcing pressure on prices. The simple economics of when there is a high demand for something and a low supply of it, consumers will start to pay more to get it. This fall we have seen even more dips in mortgage rates which only has helped foster more buyers to get active with their home searches. The end result has been bidding wars on properties which has led to higher prices for homes.
There have not been any signs that buyer demand will slow at any point in the near future. Therefore some experts are anticipating that homes will most likely keep increasing over the next 12 months.
According to a recent report there have been projections released from various sources that speculate the amount of home price appreciation. CoreLogic anticipates on the low end of 0.2%, the National Association of Realtors shared a 4.3% increase while Zillow is the most aggressive at 7%.
Some have expressed concern that we may see an increase in foreclosures from those who entered a mortgage forbearance plan this year. However, with demand so high and supply so low it is not likely that we will see any form of a foreclosure crisis. Ivy Zelman, CEO of Zelman & Associates who is a notable expert in housing and the industry recently stated, “The likelihood of us having a foreclosure crisis again is about zero percent.”
The bottom like is as we near the end of this year many of us would have thought that the pandemic would have caused more of a significant decline on the real estate market. On the contrary home sales have continued to grow and home prices have continued their upward trend and we expect to see this carry well into next year.
