Many people are concerned about future home values with today's rising prices. Some Northern Virginians are worried that with the recent increase in home prices, the U.S. will find itself in a situation similar to the 2008 housing crash.
the Future of Home Appreciation: What the Experts are Saying
According to a recent Redfin survey, 77% of homebuyers believe there is a housing bubble where they live. However, experts say that is just not true.
Most experts agree that the market is entirely different than what it was from 2007 to 2009. Earlier this month, Deputy Chief Economist at First American, Odeta Kushi, tweeted, ". . . We do need price appreciation to slow today (it’s not sustainable over the long run) but high price growth today is supported by fundamentals- short supply, lower rates (and) demographic demand. And we are in a much different (and) safer space: better credit quality, low DTI (Debt-To-Income) (and) tons of equity. Hence, a crash in prices is very unlikely."
Daryl Fairweather, Redfin Chief Economist, says, ". . . I predict home-price growth will slow significantly in 2022. What we're going through right now is closer to a ripple in the water than a bubble. Mortgage rates are already going up, which will likely stabilize demand and reduce the risk of a bubble that could burst."
Even researchers at the Dallas Fed, who recently said they see a "bubbly housing market," stated, "Based on present evidence, there is no expectation that fallout from a housing correction would be comparable to the 2007–09 global financial crisis in terms of magnitude or macroeconomic gravity. Among other things, household balance sheets appear in better shape, and excessive borrowing doesn't appear to be fueling the housing market boom."
Although home price appreciation will decelerate from the double-digit levels the market has experienced recently, many experts believe the market is stable and home values will not depreciate.
Pulsenomics recently released its latest Home Price Expectation Survey, which consists of a panel of over 100 real estate experts, economists, and market strategists from around the U.S. The board forecasts home prices will continue to appreciate. The expected year-over-year rates of home price appreciation, based on the average of all members' predictions, are found below.
What Does This Mean for Northern Virginia Homebuyers?
With mortgage rates creeping up and a limited supply of available homes in Northern Virginia, it is a challenging market to navigate. However, buying sooner rather than waiting on the market to change in your favor has its benefits. By purchasing now, those rising home prices will begin building equity for you.
If you are ready to begin searching for your home, contact one of Glass House Real Estate's knowledgeable agents.
