![Home Prices: It’s All About Supply and Demand | MyKCM](https://files.mykcm.com/2020/06/01123121/20200602-KCM-Share.jpg)
As we enter the summer months and work through the challenges associated with the current health crisis, many are wondering what impact the economic slowdown will have on Broomfield home prices. Looking at the big picture, supply and demand will give us the clearest idea of what’s to come.
Making our way through the month of June and entering the second half of the year, we face an undersupply of homes on the market. Keep in mind, this undersupply is going to vary by location and by price point. According to the National Association of Realtors (NAR), across the country, we currently have a 4.1 months supply of homes on the market. Historically, 6 months of supply is considered a balanced market. Anything over 6 months is a buyer’s market, meaning prices will depreciate. Anything below 6 months is a seller’s market, where prices appreciate. The graph below shows inventory across the country since 2010 in months supply of homes for sale.Robert Dietz, Chief Economist for the National Home Builders Association (NAHB) says:
“As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt. 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 undersupply of homes on the market today, there is 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 that item. The undersupply is also prompting bidding wars, which can drive price points higher in the home sale process. According to a recent MarketWatch article:
“As buyers return to the market as the country rebounds from the pandemic, a limited inventory of homes for sale could fuel bidding wars and push prices higher.”
In addition, experts forecasting home prices have updated their projections given the impact of the pandemic. The major institutions expect home prices to appreciate through 2022. The chart below, updated as of earlier this week, notes these forecasts. As the year progresses, we may see these projections revised in a continued upward trend, given the lack of homes on the market. This could drive home prices even higher.
Bottom Line
Many may think home prices will depreciate due to the economic slowdown from the coronavirus, but experts disagree. As we approach the second half of this year, we may actually see Broomfield home prices rise even higher given the lack of homes for sale.
How Can I Help You With Your Broomfield Real Estate Needs?
I am consistently among the Top Real estate agents in Broomfield and I strive to exceed client expectations.
You May Be Wondering… What is My Home Worth?
Do you wonder what your home is worth in the current market? Do you desire a specific Property Valuation Report that I routinely prepare for my clients? Please contact me.
If you are considering buying or selling, I would appreciate the opportunity to earn your business (or that of a friend you think I could help).
Visit www.refrealty.net. Phone: 720.351.8488, or John@RefRealty.net
For questions regarding the Broomfield Real Estate Market in general contact:
John Grandt
Realtor® | Real Estate Negotiation Specialist
Global Luxury Property Specialist
John@RefRealty.net
720.351.8488
![Ref Real Estate](https://www.northstarcompass.net/wp-content/uploads/2020/01/Ref-Real-Estate-Logo-with-New-Logo.001-e1578252858336.png)