Is the Real Estate Market In A Boom Or A Bust?
Your prediction about the housing market is probably wrong...
In the past two years, home prices have increased quickly enough to lead many to question if a crash is on the horizon.
To gain clarity on this issue, we must...
First, understand the current shift in the housing market.
The truth is, we're experiencing a pivotal moment in the supply and demand for housing. Active listings have increased by more than 26% from last year, according to realtor.com, while showings from the latest ShowingTime Showing Index have decreased by almost 17% from last year (see graph below).
This is a pivotal moment for housing because, over the past two years, there has been an incredible amount of demand (showings) for homes but not enough houses available for sale to meet that demand.
This caused a market frenzy.
At present, supply and inventory are vastly different from one another, and the market has significantly decelerated from its previous speed. This is demonstrative of the sudden slowdown that many individuals have been experiencing.
Secondly, we want to know what experts are saying about home prices in the near future.
Most experts are predicting that home prices will start to appreciate again in 2023, but at a much slower pace than what we've seen over the past two years. The average forecast from the six experts below is for national home prices to appreciate by 2.5% in the coming year. Only one of the six is calling for home price depreciation.
The decrease in activity in the real estate market has caused many to worry that we are in a housing bubble.
The demand for housing in the past two years was unprecedented and the supply was limited, which caused homes to increase in value at a rapid rate.
However, some experts predict that the national real estate market will recover and appreciate in value in the next year, even though some overheated markets may see a decrease in prices in the short term.
Matt Smith Real Estate Group is a resource for you to help you make informed decisions on buying or selling your home. Reach out to us at 573-471-2020.