{"id":1813,"date":"2021-06-25T13:00:43","date_gmt":"2021-06-25T13:00:43","guid":{"rendered":"https:\/\/phphouses.com\/blog\/?p=1813"},"modified":"2021-06-25T13:00:43","modified_gmt":"2021-06-25T13:00:43","slug":"home-price-appreciation-simple-supply-demand","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/home-price-appreciation-simple-supply-demand\/","title":{"rendered":"Home Price Appreciation Is as Simple as Supply and Demand"},"content":{"rendered":"
\"\"

Home Price Appreciation Is as Simple as Supply and Demand<\/p><\/div>\n

Home price appreciation continues to\u00a0accelerate<\/a>. Today, prices are driven by the simple concept of supply and demand. Pricing of any item is determined by how many items are available compared to how many people want to buy that item. As a result, the strong year-over-year home price appreciation is simple to explain. The demand for housing is up while the supply of homes for sale hovers at historic lows.<\/p>\n

Let\u2019s use three maps to show how this theory continues to affect the residential real estate market.<\/p>\n

Map #1<\/strong>\u00a0\u2013 State-by-state price appreciation reported by the\u00a0Federal Housing Finance Agency<\/em>\u00a0(FHFA<\/a>) for the first quarter of 2021 compared to the first quarter of 2020:<\/p>\n

\"\"

Year-Over-Year Price Appreciation<\/p><\/div>\n

As the map shows, certain states (colored in red) have appreciated well above the national average of 12.6%.<\/p>\n

Map #2<\/strong>\u00a0\u2013 The change in state-by-state inventory levels year-over-year reported by\u00a0realtor.com<\/a>:<\/p>\n

\"\"

Year-Over-Year Change in Housing Inventory<\/p><\/div>\n

Comparing the two maps shows a correlation between change in listing inventory and price appreciation in many states. The best examples are Idaho, Utah, and Arizona. Though the correlation is not as easy to see in every state,\u00a0the overall picture is one of causation<\/strong>.<\/p>\n

The reason prices continue to accelerate is that housing inventory is still at all-time lows while demand remains high. However, this may be changing.<\/p>\n

Is there relief around the corner?<\/strong><\/h4>\n

The report by\u00a0realtor.com<\/em>\u00a0also shows the monthly change in inventory for each state.<\/p>\n

Map #3<\/strong>\u00a0\u2013 State-by-state changes in inventory levels month-over-month reported by\u00a0realtor.com<\/a>:<\/p>\n

\"\"

Month-Over-Month Change in Housing Inventory<\/p><\/div>\n

As the map indicates, 39 of the 50 states (plus the District of Columbia) saw increases in inventory over the last month. This may be evidence that homeowners who have been afraid to let buyers in their homes during the pandemic are now putting their houses on the market.<\/p>\n

We\u2019ll know for certain as we move through the rest of the year.<\/p>\n

Bottom Line<\/strong><\/h3>\n

Some are concerned by the rapid price appreciation we\u2019ve experienced over the last year. The maps above show that the increases were warranted based on great demand and limited supply. Going forward, if the number of homes for sale better aligns with demand, price appreciation will moderate to more historical levels.<\/p>\n

Contact us:<\/strong>
\nPHP Houses
\n142 W Lakeview Ave
\nUnit 1030
\nLake Mary, FL 32746
\nPh:\u00a0(407) 519-0719<\/span>
\nFax:\u00a0(407) 205-1951<\/span>
\nemail:\u00a0info@phphouses.com<\/p>\n

Let\u2019s Connect:<\/strong>
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THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

Some are concerned by the rapid price appreciation we\u2019ve experienced over the last year. The maps below show that the increases were warranted based on great demand and limited supply. Finish Reading Home Price Appreciation Is as Simple as Supply and Demand<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[69],"tags":[126,25,66,49,84,42,40,63,90,20,12,48,68,28,47,89,19,6,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/1813"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=1813"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/1813\/revisions"}],"predecessor-version":[{"id":1818,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/1813\/revisions\/1818"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=1813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=1813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=1813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}