Home values have softened over the last twelve months. We are no longer seeing 6-7% annual appreciation levels for the national housing market. The current numbers are closer to 4%. Some have suggested that year-over-year appreciation levels could fall to 3% or less this year.
However, a stronger-than-expected economy and a good spring housing market have changed some opinions. Some analysts are now predicting that home value appreciation may begin to increase as we move forward.
Here are three examples:
Mark Fleming, Chief Economist of First American
“Data on the movement of unadjusted house prices during the early spring home-buying season won’t be available for a few more months, but it’s quite likely that price appreciation will accelerate again.”
CoreLogic’s April “Home Price Insights”
“Home prices nationwide, including distressed sales, increased year over year by 3.7% in March 2019 compared with March 2018…The CoreLogic HPI Forecast indicates that home prices will increase by 4.8% on a year-over-year basis from March 2019 to March 2020.”
Pulsenomics’ Quarterly “Home Price Expectation Survey”
- The 2018 4th Quarter survey called for 3.8% appreciation for 2019.
- The 2019 1st Quarter survey raised the appreciation projection for this year to 4.3%.
The Greenville market is still seeing homes appreciate but at normal levels. Recent statistics from the Greater Greenville Association of Realtors showed that home values appreciated +2.8% YTD. Average days on market increased 3.4% to 60 days. New listings were up +0.6% YTD and the months supply of inventory is still below a normal market of 6 months to 4.5 months. Greenville’s market is still a very strong seller’s market. If you’re looking to sell your home, now is the time. We have a ton of buyers looking to purchase but not a lot to choose from!
Lack of Inventory Affecting Home Values?
The housing crisis is finally in the rear-view mirror as the real estate market moves down the road to a complete recovery. Home values are up and distressed sales (foreclosures and short sales) have fallen to their lowest point in years. The market will continue to strengthen in 2019.
However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory! Buyer demand naturally increases during the summer months, but supply has not kept up.
Here are the thoughts of a few industry experts on the subject:
Lawrence Yun, Chief Economist at National Association of Realtors
“Further increases in inventory are highly desirable to keep home prices in check, the sustained steady gains in home sales can occur when home price appreciation grows at roughly the same pace as wage growth.”
Jessica Lautz, Vice President of NAR
“There’s a supply-demand mismatch… More inventory is needed at the lower end and a price reduction may be needed at the upper end.”
Danielle Hale, Chief Economist of Realtor.com
“Heading into spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower pace than we’ve seen the last few months as fewer sellers want to contend with this year’s more challenging conditions… A buyer’s experience will vary notably depending on the market and price point they’re targeting.”
Price appreciation has slowed over the past year. However, a strong economy and a good housing market have many experts thinking that home values might re-accelerate moderately throughout the rest of this year.