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    What Will Happen to Home Values in 2020?

    Will My Home Value Appreciate or Depreciate in 2020?

    With the local housing market seeming skewed to some degree from the effects of the health crisis and the general uncertainty that the country is now facing, potential purchasers and home owners are questioning if home values will be impacted. Keep in mind that the price of any item is determined by the supply as well as the market’s demand for that item.

    The National Association of Realtors (NAR) surveys over 50,000 Realtors each month about their expectations for market conditions and home sale prices to create the REALTORS Confidence Index. The most recent edition helps explain the relationship between sellers (the supply) and buyers (the demand) traffic in this pandemic.

    On Buyer/Demand

    “How would you rate buyer traffic in your area?”

    Dark Blue = Strong     Light Blue = Stable     Gray = Weak

    In the Map above, you see the Realtor survey showing that 34 of the 50 states report that buyer demand is strong, and 16 states report a stable demand.

    On Seller/Supply

    “How would you rate seller traffic in your area?”

    Dark Blue = Strong     Light Blue = Stable     Gray = Weak

    When asked about ‘supply’ 46 states (to include Washington DC) reported weak seller traffic, and only 4 reported seller traffic as stable. Right now this shows that there are far fewer homes on the market than what is needed to satisfy buyer’s needs

    Now, take a look at three industry experts and what they are saying.

    Freddie Mac:

    “Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand.”

    Ivy Zelman:

    “We note that inventory as a percent of households sits at the lowest level ever, something we believe will limit the overall degree of home price pressure through the year.”

    Mark Fleming, Chief Economist, First American:

    “Housing supply remains at historically low levels, so house price growth is likely to slow, but it’s not likely to go negative.”

    In Conclusion

    Based on what Realtors have reported, looking at the maps, and considering what the experts are saying, it seems that prices will remain stable throughout 2020. If you have had thoughts about selling your home, connect with a local real estate professional who can help you capitalize on the somewhat surprising demand in the market now.

    Julie Horton – REALTOR

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