Rising prices could trend well into 2021.
Being that we are well into Q4 of 2020 with the end of the year in sight, some have wondered how this year’s events would affect home prices. For a while now we have seen a consistent increase in prices and regardless of all that has happened this year, we can look to the big picture of supply and demand to provide the most accurate idea of what is to come.
There is still a lack of available homes on the market for sale which is applying pressure on prices. The simple economics of when there is a high demand for something and a low supply of it, many people will pay more to get it. This fall we have seen dips in mortgage rates which has helped fuel more buyers to become active with their home searches. In the end, there have been bidding wars for properties which has resulted in higher prices for homes.
There have not been any indications that buyer demand will slow at any point in the near future. Therefore some experts are anticipating that homes will more than likely keep increasing over the next year.
According to a recent report, there have been projections by a collection of sources that speculate home price appreciation rates. CoreLogic anticipates on the low end of 0.2%, the National Association of Realtors notes a 4.3% increase while Zillow is the most aggressive at 7%.
Some have expressed ideas that we may see an increase in foreclosures from those who took advantage of a mortgage forbearance plan. However, with demand so high and supply so low it is not likely that we will see 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.”
Finally, as we approach the end of 2020 many of us would have thought that the pandemic would have caused a significant decline in the real estate market. On the contrary home sales have continued to grow and home prices have continued to increase and we expect to see this trend to flow into 2021.
