REAL ESTATE
Insider
The State of the Housing Market
N O R T H E A S T F L O R I D A U P D AT E - S P E C I A L E D I T I O N
WILL HOME VALUES APPRECIATE OR DEPRECIATE IN 2020? With the housing market impacted by the health and financial crisis, some potential purchasers are questioning whether home values will decline. The price of any item is determined by supply as well as the market’s demand. Each month the National Association of REALTORS® (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for the REALTORS® Confidence Index. The latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand) during this pandemic.
Buyer Demand
The map below was created after asking the question: “How would you rate buyer traffic in your area?”
Seller Supply
The index also asks: “How would you rate seller traffic in your area?”
The map indicates 46 states and Washington, D.C. reported ‘weak’ seller traffic, three states reported ‘stable’ seller traffic, and one state reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is Note: In Northeast Florida, demand was very strong going needed to satisfy buyers looking for homes. With demand still into the 2nd Quarter, so stable would indicate continued stronger than supply, home values should not decline. Note: In Northeast Florida, there is tremendous opportunity for Sellers strength. right now. Pent-up demand coupled with a low inventory Source: Keeping Current Matters creates a very strong selling environment. The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 34 of the 50 U.S. states, buyer demand is now ‘strong’ and 16 of the 50 states have a ‘stable’ demand.
What are the experts saying? Here are the thoughts of three industry experts: 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.”
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.” Bottom Line: Based on all market indicators, we believe that housing prices will remain stable throughout 2020 and anticipate 3 percent appreciation. If you’re thinking about listing your home, let’s discuss how you can capitalize now on the demand in our local market.
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