Here’s what the data says about the future of our housing market.
As an agent, one of the most common questions I receive is, “What’s happening in the real estate market?” Today I want to answer that question by taking a look at our current trends.
If you check out the video at 0:23, you can see a chart from Keller Williams that shows average home prices going back to 1990. This chart has plenty of information, but I want you to pay special attention to the yellow trendline tracking average appreciation. **The data shows that, on average, homes appreciate by about 4% every year. **
If you follow the line, you can see that appreciation was consistently 4% in the 1990s, but it started increasing around 2004. We all know what happened next; the Great Recession hit, and houses began depreciating for a few years. The fascinating part is that we can see exactly how long it took our market to recover from this crash. Throughout the 2010s, home prices appreciated faster and faster until we caught up to the average of 4%.
“It looks like we are in for another strong year of appreciation.”
Now, we’re well over the average. Last year, the average home appreciated by 17%! Because of our crazy appreciation the last few years, many people think our market is overinflated, but if we look at this trendline, we can see that we’re just returning to normal from a period of stagnation.
So what are the chief economists at Keller Williams projecting for the future? They’re saying we could be in a state of high appreciation for one to five years. In other words, they’re bullish on the real estate market, but anything could happen.
What could put a stop to our crazy appreciation? Global conflicts, such as the war in Ukraine, could destabilize our market. Interest rates are also rising, so homes will become less affordable. However, if no outside force changes our market, it looks like we are in for another strong year of appreciation.
If you have questions about today’s topic or how you can navigate our real estate market, please call or email me. I am always willing to help. Make it a great day!