Are We Headed for A Housing Bubble?
Home values have appreciated at a rapid pace this year, over 7% while the average since 1991 has been 3.8%. Many can remember the housing crash in from 2007 – 2011 and are concerned, remembering the that prices were 22% above average. That's a big difference from what is happening today.
So, what has happened to cause this jump in average prices in 2020? In a word and number – COVID-19.
Staying home and working remotely due to the pandemic has made people look at their current home and reevaluate it. Many homeowners want a big, private backyard with room for pets and children. Buyers also want amenities for work and leisure, like a home office, a gym, and a living room that looks good in a video call. Since homeowners have to stay home, they want comfort and function, a safe retreat that they can enjoy after the pandemic.
At the same time, worries about the pandemic have caused many homeowners to delay selling their home.
More people buying and fewer people selling has caused prices to rise. But, with a vaccine on the way, more homeowners will be putting their houses on the market. This will better balance supply with demand and slow down the rapid appreciation. That's why the most recent forecasts for 2021 estimate a 2 – 4.5% increase.
If you have delayed buying or selling due to worries about a housing bubble, put your mind at ease and give Veta a call.
Veta The Realtor