Here’s what you need to know about our market’s rising home prices.

One of the most common questions we’ve heard recently is: “What’s going on with home prices?” Most people know they’ve been rising like crazy over the past year, but how long will that last? Will they go down anytime soon? Let’s talk about it.

To figure out where home prices might be heading, we first need to go over some common real estate terms. For example, appreciation is when home prices increase in value over time. On the other hand, depreciation is when home prices decrease in value over time. The last term we need to know is deceleration, which is when home prices increase, but the rate at which they’re increasing slows.

Home values are expected to appreciate by close to 12% by the end of 2021.

Most people know that the market is good, but homes have appreciated every month for the last 114 straight months. This means homes have increased in value for nine and a half years. Pulsenomics interviewed a series of economists and real estate experts to see what they thought the future of home prices would be. You can look at their results at 1:56 in the video above.

Based on their findings, home values are expected to appreciate by close to 12% by the end of 2021. This number is incredibly high. However, we can also see that the rate of appreciation is expected to decrease in 2022 and beyond. Home values will continue to increase, just not at the crazy rate we’ve seen this year. Since 1995, home values have appreciated around 5% every year on average. Now it looks like things will begin to return to normal.

What does this mean for homebuyers? If you’ve been waiting for a price drop to get into the market, it looks like one isn’t coming anytime soon. Even if the rate of appreciation slows, it doesn’t seem like we’ll see depreciation for a while.

If you have questions about today’s topic or anything else related to real estate, please call or email us. We are always happy to help!