The rate at which home prices are increasing (called “appreciation”) is slowing across the country, including here in the Puget Sound region. But this doesn’t mean that home prices are falling. We’re seeing quite the opposite, actually.
The slowing growth of year-over-year home prices for the last 10 months is shown on the chart below. Although appreciate rates have decreased by about 2.5% over the last 10 months, we are still seeing a year-over-year home value increase of 4.2% as of January 2019.
Experts expect appreciation will continue to decline through 2020, as shown in the chart below. But as you can see, these experts are not suggesting home values will fall during this timeframe. Instead, homes will simply increase in value at a slower pace.
Based on these predictions, on average, a home purchased in 2019 would expect to see an overall growth in value of 12.7% by 2023. As an example, if these predictions hold true, a $500,000 home purchased in 2019 would be worth $563,500 by 2023. That’s still a solid return on investment!
Keep in mind the expert predictions above are still just predictions. The real estate market can, has, and will fluctuate. Nobody can say for sure exactly where the market will be 4, 5, or 10 years down the road. If you’d like to discuss these trends further, please feel free to reach out to us at any time!