It’s time for the April edition of our hot-off-the-press market report.
Spring is here and the market is on fire! If you’ve been thinking recently about the value of your home, I’ve got some great news to report. CoreLogic’s chief economist Dr. Frank Nothaft recently said that “[…] the net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”
Also, according to the most recent Case Shiller report, appreciation was steady between June and November of last year. While there was a small slowdown in December, this doesn’t mean prices went down. All it means is that we went from an appreciation rate of 6.4% in November to 6.3% in December.
This slowdown is very normal for the last month of the year. Sellers whose properties didn’t move off the market sooner are simply ready at that point to have their transaction over and done with. This translates to lower prices.
Next, I’d like to give you a look at the average annual appreciation rates we saw in the past, including rates from during the housing bubble between 2000 and 2007. To give you some historical context, we can see that the pre-bubble appreciation rate for the 12 years between 1987 and 1999 was 3.6% per year.
During the bubble, the appreciation rate was at more than 7% per year. Then during the bust period between May 2007 and December 2011, values depreciated by 5.5% per year. Since then, appreciation rates during the recovery period to date have been at 5.3% per year.
Now that we know what has led us to where we are today, let’s look at what is being projected as we move forward into the next five years. A survey conducted by a panel of over 100 economists, real estate experts, and market strategists found that most experts believe we will finish 2018 with an appreciation rate around 5%.In 2019, the rate is projected to slow down to around 4%. Then, appreciation is expected to level off at 3% per year from 2020 until 2022.
Personally, I believe that anything past 2019 is too far off to accurately predict. However, if these predictions are true, we will soon be back to normal appreciation rates.
So, what about cumulative house appreciation by 2022. The Bulls are at 27.4% and the Bears are at 8.3%, with the average projection being 18.2%.
With all of that being said, is it a good time to sell? Well, according to Daren Blomquist, senior VP at ATTOM Data Solutions, “It is the most profitable time to sell a home in more than 10 years.” However, he also said that homeowners are staying put much longer than we’ve ever seen.
So, if you are thinking of putting your home on the market, I’d like to invite you to join us for our next Home Selling Sharks Seminar on April 7. The event will be at Hilton Garden Inn in Fort Washington, beginning with a breakfast at 8:15 a.m. with the seminar starting at 9:15 a.m. To sign up, visit http://www.homesharkseminar.com.
If you have any other questions or would like more information, feel free to give me a call or send me a call or send me an email. I look forward to hearing from you soon.