This has been quite the tumultuous year! An unforeseeable global health crisis brought the economy to a screeching halt, sending unemployment rates soaring, closing businesses nationwide, and leading to the enactment of a plethora of new changes and restrictions on the way we do everything from grocery shopping to buying houses. All the ups and downs have left many would-be investors wondering whether 2020 home values will continue the recent trend of appreciation, or if we’re in for a decline.
Will 2020 Home Values Decrease?
If you’re thinking of buying or selling a home in the Raleigh area, you’re probably curious as to what the rest of 2020 will bring to real estate—is it a good time to make a move or is it better to wait out the market?
Here’s what you need to know about predictions for prices in 2020.
Home prices are based on supply and demand
One of the most important things to understand about real estate is that price isn’t based on the economy or the stock market—it’s based on supply and demand. In real estate, that supply is the number of homes for sale, and that demand is the number of buyers looking.
Demand for homes has stayed strong in most states
Though the number of sales closed during the past few months did decline a bit, agents nationwide supported stable or strong buyer traffic—which is great news for the market. In fact, most states, including North Carolina, listed buyer demand today as “strong”.
Supply, however, is quite low
The supply of homes is determined largely by the number of sellers willing to list their homes. Even before the start of the pandemic, seller traffic and the inventory of homes for sale was quite low. Now, however, agents from all but four states (Wyoming, Louisiana, Virginia, and Alaska) report that the number of homes for sale is too low to meet buyer demand.
When demand exceeds supply, prices rise
While a low supply of homes might not be entirely favorable to buyers, it is favorable to real estate in general, as it helps to grow home values and prevents a collapse in housing prices (which is, in part, what caused the 2008 housing bubble burst).
While the country struggles with reopening and managing unemployment, price growth may slow a bit, but odds are, it will continue, and prices are certainly not expected to decrease.
The Bottom Line: Prices Should Stay Steady
If you’ve been thinking of making a home purchase or selling your current home in the coming year, you should feel safe in your decision to move forward with your investment. While the economy might seem to stand on uncertain ground, real estate has remained rock-solid not just through the pandemic, but also for several years beforehand.
Buying or Selling in Raleigh?
If you’ve been thinking of buying or selling in the Raleigh area, Linda Craft & Team is here to help. Contact us today at 919-235-0007 to find out more about how we can put our 350+ years of combined experience to work for you.