Supply & Demand Will Determine Future Home Values

Dated: 08/09/2018

Views: 10

Will home values continue to appreciate throughout 2018? The answer is simple: YES! – as long as there are more purchasers in the market than there are available homes for them to buy. This is known as the theory of “supply and demand,” which is defined as:

“The amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.”

When demand exceeds supply, prices go up. Every month this year, demand (buyer traffic) has increased as compared to last year and for the first five months of 2018, supply (the number of available listings) had decreased as compared to last year. However, a recent report by the National Association of Realtors (NAR) revealed the first year-over-year increase in supply in three years.

Here are the numbers for supply and demand as compared to last year since the beginning of 2018:

The increase in the June numbers doesn’t mean that prices won’t continue to appreciate. In that same report, Lawrence Yun, NAR’s Chief Economist, explained:

“It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels.

Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”

Bottom Line

The reason home prices are still rising is that there are many purchasers looking to buy but very few homeowners ready to sell. This imbalance is the reason prices will remain on the uptick.

Blog author image

Paul Franklin

A Straight Shooter... Making personal connections is so valuable. Like any other important relationship in your life, the one you build with a real estate professional should have a foundation of t....

Latest Blog Posts

Home Sales Expected to Continue Increasing in 2019

Tuesday August 28th, 2018  For Sellers, Housing Market Updates, Move-Up BuyersFreddie Mac, Fannie Mae, and the Mortgage Bankers Association are all

Read More

The Net Worth of a Homeowner is 44x Greater Than A Renter!

Monday August 20th, 2018  First Time Home Buyers, For Buyers, Move-Up Buyers, Rent vs. BuyEvery three years, the Federal Reserve conducts their Survey of

Read More

Supply & Demand Will Determine Future Home Values

 Thursday August 9th, 2018  For Buyers, For Sellers, Housing Market Updates, PricingWill home values continue to appreciate throughout 2018? The answer is simple: YES!

Read More

Housing Market: Another Gigantic Difference Between 2008 and 2018

Thursday August 16th, 2018  First Time Home Buyers, For Buyers, For Sellers, Housing Market Updates, Move-Up BuyersSome are attempting to compare the current housing

Read More