WHAT ARE THE EXPERTS SAYING ABOUT HOME PRICES?
Source: Keeping Current Matters - June 23, 2020
A worldwide pandemic and an economic recession have had a tremendous effect on the nation. The uncertainty brought about by both has made predicting consumer behavior nearly impossible. For that reason, forecasting home prices has become extremely difficult.
Normally, 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. Mortgage applications to buy a home just rose to the highest level in 11 years while inventory of homes for sale is at (or near) an all-time low. That would usually indicate strong appreciation for home values as we move throughout the year.
Some experts, however, are not convinced the current rush of purchasers is sustainable. Ralph McLaughlin, Chief Economist at Haus, explained in their June 2020 forecast why there is concern:
“The upswing that we’ll see this summer is a result of pent-up demand from homebuyers and supply-in-progress from homebuilders that has simply been pushed off a few months. However, after this pent-up demand goes away, the true economic scarring due to the pandemic will begin to affect the housing market as the tide of pent-up demand goes out.”
The virus and other challenges currently impacting the industry have created a wide range of thoughts regarding the future of home prices. Here’s a list of analysts and their projections, from the lowest depreciation to the highest appreciation:
We can garner two important points from this list:
- There is no real consensus among the experts.
- No one projects prices to crash like they did in 2008.
Bottom Line
Whether you’re thinking of buying a home or selling your house, know that home prices will not change dramatically this year, even with all of the uncertainty we’ve faced in 2020.
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CURRENT LISTINGS
Laguna Beach
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VIRTUAL TOURS AND
IN PERSON SAFE SHOWINGS AVAILABLE
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2841 Ridge Dr - $2,899,000
4 bd, 4.5 ba, 4,400 sqft
2841Ridge.com |
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885 La Mirada Lot - $599,000
25' x 100' Ocean View Buildable Lot
LaMiradaLot.com |
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31345 Holly Drive, Laguna Beach
For Lease $10,950/month
South Laguna coastline view home, over 2,600sf.
Annual, unfurnished lease term. |
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30802 Coast Hwy K29 - $259,000
Laguna Terrace 2010 manufactured home on leased land.
Three bedrooms, remodeled, private yard, hillside vistas.
CoastK29.com |
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730 Fontana Way - $2,199,000
Multiple Offers - In Escrow
3 bd, 3.5 ba, 2,343sf
Representing Seller
730Fontana.com |
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808 Quivera St - $1,599,000
Multiple offers - In Escrow
3 bd, 2 ba, 1,500 sqft
Representing Seller |
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977 Noria - $1,143,000
3 bd, 2 ba, 1,536 sqft
Represented Seller |
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MARKET STATISTICS
Laguna Beach - June 2020
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Active - 231 (Down 2% vs. last month.)
Pending - 71 (Up 45% vs. last month.)
Sold in June - 36 (Up 112% vs May)
Under $1,000,000 - 5
$1,000,000 - $2,000,000 - 14
$2,000,000 - $3,000,000 - 7
$3,000,000 - $5,000,000 - 6
$5,000,000 - $10,000,000 - 4
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