Home values are skyrocketing at a pace not seen since the recovery from the Great Recession as high demand meets a prolonged inventory shortage.
“Home values are accelerating more quickly than any time since 2014, marking a sharp turnaround from a market briefly put on hold during the outbreak of the pandemic this spring,” said Jeff Tucker, Zillow senior economist.
Zillow Real Estate reports annual home value growth of 5.8%, the largest in nearly two years. The market report predicts the hot housing market will continue with an additional home values increase of 2.9% by the end of 2020. Growth is expected to continue in 2021 with a forecasted 7% growth in home values – that’s up from the previous forecast of 4.8% growth.
The surge in home values comes in response to persistent strong demand that drove inventory down 36.4% year over year, and list prices up 11.6% above 2019 in the week ending Oct. 10, according to the latest Zillow Real Estate Market Report.
The data shows the housing market is strong despite an uncertain economy, the report said.
Home prices are growing as buyers wage bidding wars over the few options available, Tucker said. While builders are scurrying to fill the gap, it will take at least several months to catch up. More inventory could encourage nervous would-be sellers to put their homes on the market and lead to price stabilization.
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