The National Association of Realtors has issued their forecast for median home prices across the country. The median priced home in 2018 was $258,900 and is projected to be $274,000 in 2020 based on roughly 3% home price appreciation. That’s right, the average priced home will increase by $15,000 over the next two years. Depending upon where you sit, that’s either great news or it means it’s time to quit renting and look toward investing in your own home. Based on Realtor surveys from December 2018 through February 2019, the most optimistic outlook for home prices are in Idaho and Alabama with three to five percent increases expected. California, Texas, Illinois, New York, and Massachusetts project the most conservative price growth outlook from zero to two percent.
The last decade has shown, for the most part, increased home sales and increased home prices. It seems home prices outpaced wage growth recently which has led to a slight slowdown in home sales. The low supply of homes for sale combined with strong demand led to weaker home sales, but increased sales prices for those available homes. More than half of homes sold last year did so above their asking price. Home prices are above their “bubble peaks” of 2006 in more than half of the largest markets in the nation. Properties in urban areas have seen higher appreciation rates than homes in rural areas with more of today’s homebuyers wanting to be near downtown for work and entertainment.
While 2018 was still a good year for home sales, it was a downturn from 2017 and caught the attention of many Realtors across the country. Listings were no longer receiving multiple offers the first day the home hit the market. The bidding wars had slowed in most markets and especially for homes priced over $300,000. The higher the home price, the longer it took to sell in 2018.
New home construction has finally increased to help provide more housing to replace some of the existing homes that are nearing the end of their livable cycle. The overall projection for home sales is slightly down over prior years with new homes representing a slight increase and existing homes seeing a slight decline. Home prices are projected to be up 2-3% over prior years with the larger home price appreciation being in home prices at or under $300,000. The higher the sales price of a home, the lower price appreciation is projected over the next few years.
Today we are joined by Chris Lauterbach, Certified Relocation Professional and Relocation Division Manager for Colonial National Mortgage. Chris has more than 20 years' experience in the mortgage banking business, with the majority of that time dedicated to corporate relocation and corporate affinity relationships nationwide. He has been actively involved with the Worldwide Employee Relocation Council and several regional relocation councils across the country, and is the current Vice President of the North Texas Relocation Professionals. Chris has been married to his wife Kristen for over 21 years and has three almost-grown children.