{"id":836,"date":"2020-06-05T14:05:25","date_gmt":"2020-06-05T14:05:25","guid":{"rendered":"http:\/\/phphouses.com\/blog\/?p=836"},"modified":"2020-06-05T14:05:25","modified_gmt":"2020-06-05T14:05:25","slug":"home-prices-supply-demand","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/home-prices-supply-demand\/","title":{"rendered":"Home Prices: It\u2019s All About Supply and Demand"},"content":{"rendered":"
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Home Prices: It\u2019s All About Supply and Demand<\/p><\/div>\n

As we enter the summer months and work through the challenges associated with the current health crisis, many are wondering what impact the economic slowdown will have on home prices. Looking at the big picture, supply and demand will give us the clearest idea of what\u2019s to come.<\/p>\n

Making our way through the month of June and entering the second half of the year, we face an undersupply of homes on the market. Keep in mind, this undersupply is going to vary by location and by price point. According to the\u00a0National Association of Realtors<\/em>\u00a0(NAR), across the country, we currently have a 4.1 months\u00a0supply<\/a>\u00a0of homes on the market. Historically, 6 months of supply is considered a balanced market. Anything over 6 months is a buyer\u2019s market, meaning prices will depreciate. Anything below 6 months is a seller\u2019s market, where prices appreciate. The graph below shows inventory across the country since 2010 in months supply of homes for sale.<\/p>\n

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Housing Inventory<\/p><\/div>\n

Robert Dietz,\u00a0Chief Economist<\/em>\u00a0for the\u00a0National Home Builders Association<\/em>\u00a0(NAHB)\u00a0says<\/a>:<\/p>\n

\u201cAs the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt. Estimates vary, but based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.\u201d<\/em><\/p><\/blockquote>\n

Given the undersupply of homes on the market today, there is upward pressure on prices. Looking at simple economics, when there is less of an item for sale and the demand is high, consumers are willing to pay more for that item. The undersupply is also prompting bidding wars, which can drive price points higher in the home sale process. According to a recent\u00a0MarketWatch\u00a0<\/em>article<\/a>:<\/p>\n

\u00a0<\/em>\u201cAs buyers return to the market as the country rebounds from the pandemic, a limited inventory of homes for sale could fuel bidding wars and push prices higher.\u201d<\/em><\/p><\/blockquote>\n

In addition, experts forecasting home prices have updated their projections given the impact of the pandemic. The major institutions expect home prices to appreciate through 2022. The chart below, updated as of earlier this week, notes these forecasts. As the year progresses, we may see these projections revised in a continued upward trend, given the lack of homes on the market. This could drive home prices even higher.<\/p>\n

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Home Prices Projected to Continue to Appreciate<\/p><\/div>\n

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

Many may think home prices will depreciate due to the economic slowdown from the coronavirus, but experts disagree. As we approach the second half of this year, we may actually see home prices rise even higher given the lack of homes for sale.<\/p>\n

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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 OF ADVICE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

Home Price Appreciation Finish Reading Home Prices: It\u2019s All About Supply and Demand<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[69],"tags":[38,18,183,158,126,52,66,49,42,23,40,63,105,20,12,48,13,28,19,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/836"}],"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=836"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/836\/revisions"}],"predecessor-version":[{"id":840,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/836\/revisions\/840"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}