Home prices, it’s all about supply and demand. When I talk to a lot of people, I’m constantly hearing confusion on why home prices aren’t going down with the current state of the economy. The answer is simple. It’s all about supply and demand.
As the economy begins to recover later in 2020,
we expect housing to play a leading role.Robert Deitch
The National Home Builders Association
Housing enters this recession under built not over built. Estimates vary but based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units. Given the under supply of homes on the market today there’s an upward pressure on prices.
Looking at simple economics, when there is less of an item for sale and the demand is high, consumers are willing to pay more for the item. The under supply is also prompting bidding wars which can drive price points higher in the home sale process.
According to a recent Market Watch article as buyers return to this market, as the country rebounds from a pandemic, a limited inventory of homes for sale can fuel bidding wars and push prices higher. We don’t necessarily see extensive bidding wars in the Tulsa Metro area but we are seeing homes stay on the market for a day to less than a week with multiple offers. So that means you’re competing against other buyers.
In addition, experts forecasting home prices have updated their projections given the impact of the pandemic. The major institutions expect home prices to appreciate for 2022. An updated chart confirms this as well.
As this year progresses we may see these projections revised and continue in an upward trend, given the lack of homes on the market and this could drive home prices even higher. Again, it’s all about supply and demand.
Bottom line, many may think that the home prices will depreciate here in the Tulsa Metro area and across the United States due to the economic slowdown from the Corona Virus, but experts disagree and that is not what we’re seeing here in Oklahoma.
As we approach the second half of this year we may actually see home prices rise even higher, given the lack of homes for sale. If you’ve been thinking about buying or selling but you aren’t sure about timing with everything going on right now, I’d have you consider it.
If you’re ready to buy or sell or maybe both, let’s connect to see if now is time to put your plans into motion. With low mortgage rates leading the way it is a great time to take advantage of your position in today’s market.