Last week, a very well-respected real estate analytics firm surprised many with their home price projection for the next twelve
months. CoreLogic, in their latest Home Price Index said:
“The economic downturn that started in March 2020 is predicted to cause a 6.6% drop in the HPI
by May 2021, which would be the first decrease in annual home prices in over 9 years.”
The forecast was surprising as it was strikingly different than any other projection by major analysts. Six of the other eight
forecasts call for appreciation, and the two who project depreciation indicate it will be one percent or less.
Here is a graph showing all of the projections:
There’s a simple formula to determine the future price of any item: calculate the supply of that item in ratio to the demand for
that item. In housing right now, demand far exceeds supply. Last week mortgage applications to buy a home were 33% higher
than they were at the same time last year. The available inventory of homes for sale is 31% lower than it was last year. Normally,
these numbers should call for homes to continue to appreciate.
Bottom Line
Because of the uncertainty with the pandemic, any economic prediction is extremely difficult. However, looking at the limited
supply of homes for sale and the tremendous demand for housing, it is difficult to disagree with the majority of analysts who are
calling for price appreciation.
Liliana Reeves P.A, REALTOR|📲 305-609-3525 | Liliana.Reeves@GMail.com | www.LilianaReeves.com
“Selling Your Home Is My Business and Finding Your Next Home Is Too”