New Report – Home Price Appreciation Predicted to Slow Nationally
A new report by Veros Real Estate Solutions indicates that the average projected appreciation rate for the nation’s top 100 housing markets will only increase on average 1.9% through the first quarter of 2021. Previous forecasts were a lot more optimistic, but due to the COVID-19 pandemic and economic uncertainty, the forecast was adjusted.
“Home price trends and forecasts certainly take a backseat to more pressing health and safety issues during this unprecedented tragedy. While we expect a softening of house prices in the near-term, we anticipate a rebound when the COVID-19 pandemic subsides,” said Darius Bozorgi, CEO of Veros Real Estate Solutions. “The fundamental economic principles under which housing has been operating in recent years are solid. Real estate prices will be poised to recover when we see employment return across the nation.”
While slower growth is anticipated nationally, there is a silver lining, especially for those living in Idaho. The Boise metro area is forecasted to be the top real estate market in the country, seeing a modest 7.6% appreciation in prices. That is down from the double-digit increases the area has been seeing the past few years. Third on the list is Idaho Falls, where they’re projected to see a 6.3% appreciation.
“Right now, we see economic variables at odds across the country,” said Eric Fox, Veros Vice President of Statistical and Economic Modeling. “On one hand, we have historically low interest rates that typically stimulate demand and increased prices. On the other hand, unemployment is rising rapidly and GDP is falling quickly which normally drives house prices down. Finally, we have many people who have taken their homes off the market, reducing supply, and many buyers sitting on the sidelines temporarily, reducing demand. This reduced demand/supply scenario isn’t really pushing prices up or down. The combination of all of these factors results in mild forecast depreciation on average for the next quarter with a return to normal appreciation rates later in the year and into 2021.”
According to the report, the housing supply is a factor in market performance. Since the demand for housing in Boise continues to be high, and supply is extremely tight, prices are going to continue climbing. The good news for those looking to buy a home is that while the prices will continue to climb, they’re not anticipated to climb at the pace the area has seen recently.