Home prices will continue to appreciate this year, according to financial experts
It’s clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for “When is the housing market going to crash?” has actually spiked 2450% over the past month. In addition, Jim Dalrymple II of Inman News notes:
“One of the most noteworthy things that came up in Inman’s conversations with agents was that every single one said they’ve had conversations with clients about whether or not the market is heading into a bubble.”
(Read more: 3 Reasons We’re Not In A Housing Bubble)
To alleviate some of these concerns, let’s look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here’s what they had to say:
“Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. … consumer surveys indicate that household buying intentions are now the highest in 20 years. … As a result, the model projects double-digit price gains both this year and next.”
“Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”
“Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”
“There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.”
The average expert projection for home price appreciation this year is 5.9%. As home values rise, it’s a great time to make a move in the housing market.
Central Oregon home prices continue to climb
In the most recent Beacon Report for May 2021, the numbers are record-breaking once again. The report compares the rising numbers year over year in Central Oregon and what’s driving the market here locally:
- Last month, Bend SFR had another significant increase in median sale price to $651k! Of the 237 total SFR sales in Bend, 40 sales were in the $1M and higher price range. Sales in this range account for nearly 17% of all sales in Bend with the highest sale at nearly $3.5M.
- Redmond SFR had a large increase in median sale price in the prior month (March) to$412k, and stayed relatively stable last month at $413k.
- The sales data for Sunriver put the median sales price for a single-family home at $906,000. Homes in Sunriver were on the market for an average of five days. Prices in Sunriver have been on the upswing since the third quarter of 2016 when the median sales price was $385,000.
- SFR inventory levels in Central Oregon remain low resulting in upward pressure on sale prices.
View the full report May 2021 Beacon Report:BEACON-REPORT-May-2021
Let’s work together
There’s a lot happening in today’s housing market, and whether you’re buying or selling a home, the process is moving quickly. More than ever, having a real estate pro on your side makes all the difference in your success.
- 5 Common Misconceptions About Today’s Real Estate Market
- Record Low Inventory Means Now Is A Great Time To Sell Your Home
- How To Be A Competitive Buyer In Today’s Market
If you’re thinking about making a move, let’s connect to discuss what’s happening in our local Central Oregon market and how we can help you achieve your real estate goals: