Where Are Real Estate Prices Headed???

Zillow Economist Predict Price Increases for 2023 and 2024

As we have seen over the last decade it has been more difficult to predict the future of the real estate market than it was in the past when steady 3%-5% price increases were more the norm.  The great recession, the recovery, Covid, and the effects of remote work are all dynamics that have impacted the real estate market nationally and specificall here in Bend, Oregon.

Some economist are forecasting possible price decreases in 2024 while others are forecasting price increases. Ultimately, there are many factors that go into deciding when to sell or buy real estate with individual motivations being widely varied, including current and future real estate prices. Like the stock market, we would all love to know we bought low and sold high, however, waiting to time the market perfectly is difficult.

We do know that over a longer time horizon, the Bend and Central Oregon real estate market has proven resilient with values increasing due to the high quality of life that continues to make it a desirable place to live. 

Zillow Economist Forecast 

Zillow economists are expressing a robust bullishness towards the US housing market, forecasting a surge of over 6% in home prices over the next year. According to their Home Value Index, they predict a rise of 5.8% by the end of 2023, further escalating to a 6.5% increase by July 2024. 

What sets Zillow's prediction apart is its emphasis on the current housing inventory shortage as a driving force behind rising prices. The reduction in available homes on the market, down by half since July 2019, is a key factor that has maintained the upward pressure on home prices. Despite elevated mortgage rates, the scarcity of homes available for sale continues to exert this influence.

Zillow researchers pointed out that this tight inventory situation, coupled with persistently high mortgage rates, is also expected to keep sales volume limited in the upcoming months. The challenge of affordability has been evident over the past year, largely attributed to the impact of high mortgage rates. While such rates traditionally dampen demand, they've also discouraged existing homeowners from listing their properties, favoring the historically low rates at which they financed their homes in the past.

This dynamic has led to an uneven housing market, where the prospects of improved affordability hinge on a more significant reduction in mortgage rates. Industry experts suggest that rates would need to fall into the 5% range to unlock greater inventory availability.

So, for now prices in Bend have continued to remain at near market highs. If you are considering selling, it can be a great time to capture the growth in equity and if you are buying consider a long growth mindset. 

Reach out to me if you would like to discuss any of your real estate needs now or in the future. 

Cheers,