Where is the Market Headed?

Where is the real estate market headed?

When will prices go down?

These are some of the most frequently asked questions that we get here at The Oak Agency. It’s a great topic of discussion that shows how connected we all are to the information available with the click of a button. As homeowners we need to know how to evaluate the potential risk of our investment, i.e. buying or selling property. This is why staying up to date on the changes in the market can make all the difference when you are preparing to buy or sell. The Nationwide Real Estate Market hit rock bottom in 2008 (moment of silence for the loss) and in Southeast Florida we all felt the magnitude of the bubble burst. Lax financial regulations and failure of regulators intervening is largely to blame for the housing bubble burst. Now, 10 years later we are riding the home price increases with cautious optimism.

CoreLogic recently released their Home Price Index Report. One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from July 2013 to July 2018 to show how prices over the last five years have fared.

As you can see in the graph, the highest price appreciation occurred in the lowest price range with 48% growth, while the highest priced homes appreciated by 25%. This has been greatly fueled by the lack of inventory of homes available at the lower price ranges and high demand from first-time buyers looking to enter the market.

Where were prices expected to go?

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).

According to the Q3 2014 survey results, national homes prices were projected to increase cumulatively by 19.5% by December 2018. The bulls of the group predicted home prices to rise by 27.8%, while the more cautious bears predicted an appreciation of 11.2%.

Where are prices headed in the next 5 years?

Data from the most recent HPES (Home Price Expectation Survey) shows that home prices are expected to increase by 20.0% over the next 5 years. The bulls of the group predict home prices to rise by 31.2%, while the more cautious bears predict an appreciation of 9.3%.

Bottom Line

Every day, thousands of homeowners regain positive equity in their homes. Some homeowners are now experiencing values even greater than those before the Housing Bubble Burst. If you’re wondering if you have enough equity to sell your house and move on to your dream home, let’s get together to discuss conditions in our neighborhood!