But house prices ultimately change over time, and by using historical trends from the last decade to project these forward by ten years, we can start to see what long-term changes could look like, as well as how investments made in your home today could increase the returns in years to come, as house prices continue to rise.
But let’s not ignore the current pandemic and the way that it’s impacting both property prices and the way that we’re rethinking what we want from our homes.
We’re doing a deep dive into the projections of how much it could cost to buy a home across the US by 2030, as well as the impact that COVID-19 has had on real estate markets in each state and the country’s 50 biggest cities.
The Average US Home Could be Worth $382,000 by 2030
House prices in the US have risen by 48.55% in the last ten years (from $173k to $257k) and if they continue to grow at this rate for another decade, the average US home will be worth $382k by 2030.
But across such a vast country, the picture inevitably varies.
To give an example, in Nevada, house prices have more than doubled since 2010 (105.84%), while in Connecticut, the average price has increased by just 1.12% over the same period.
So then, if house prices continue to increase at this rate over the next ten years, how would the average house price look across the nation?
The state where house prices are predicted to be the highest by 2030 is California, where the average home could top $1 million if prices continue to grow at their current rate.
Other states expected to see their average house price rise above the $750k mark include Hawaii, Washington and Colorado.
Then when we look at how 2030 prices could look in America’s 50 most populated cities, it’s not a surprise to see that six of the top ten most expensive cities are located in California.
In fact, prices in two cities, San Francisco and San Jose, are actually projected to reach an average of more than $2 million if they continue to increase in value at the same rate.
Prices in six other cities could rise above $1 million - Oakland, Seattle, Los Angeles, San Diego, Boston, and Long Beach.
The Impact of COVID-19 on the Value of Homes in the US
The outbreak of COVID-19 has had an unbelievable impact on all areas of our lives and the economy at large, but how have house prices changed since the pandemic started?
We’ve taken a deep dive into home value data to analyze the impact that has been seen across the country.
And, on the whole, we can reveal that house prices have continued on their pre-pandemic upward trajectory, rising by 2.80% from $250k in March, to $257k in September.
More than ever before, people are spending a significant amount of time in their homes, and this has given them the time to think about what they really want from their space.
For some, this means that renovations and remodeling are currently in the pipeline on their current property. but For others, it means finding their forever home and making it just right; whatever that takes.
Of course, there’s another factor to consider here, and that’s the strong shift in attitudes toward the workplace and remote working. Many are now realizing that they don’t need to live so close to their workplace and are moving out to the suburbs.
And it’s this renewed interest in our homes, due to the pandemic, that has kept prices on the up.
But, looking at the bigger picture, how has the housing market reacted throughout the course of the pandemic around the country by state and in our major cities?
In Florida, property prices have risen by 6.61% in the months since the President declared a national emergency. Arizona, Idaho, and Utah have all seen increases of more than 5%.
On the other hand, Alaska is the only state where house prices have dropped over the last six months, seeing a decline of 3.28%.
Interestingly, the few cities to see a drop in prices following the pandemic were amongst the biggest in the country, with San Francisco seeing prices drop by 2.08% since March, while prices also stalled in New York City, rising by just 0.92% between March and September.
Again, this could be a by-product of the fact that millions of Americans are now working from home as a result of the coronavirus pandemic, leading many to leave behind their apartments in the cities and move to the suburbs.
Other cities that saw house prices stall include Detroit, Washington, D.C. and New Orleans, which again are highly populated cities.
However, it seems that COVID has had a limited effect on many other housing markets, such as in San Jose, where prices continued to rise at a rate of 6.75% in the last six months, followed by Phoenix, Arizona (6.25%), Memphis, Tennessee (6.09%) and Mesa, Arizona (6.05%).
To estimate property prices in 2030, we took the average price in each state and the 50 most populated cities in the US for the present day (September 2020) and ten years ago (September 2010).
We then calculated the rate of change in values between the two dates and applied this rate of change to the average price in September 2020 to estimate how they might look in 2030, assuming that they continue on that same trajectory.
To show the effect of COVID-19 on house prices, we looked at how prices had changed between March 2020 (when the pandemic was declared a national emergency) and September 2020.
One effect of the pandemic is an increase in the demand for housing associated first with the public health measures of the pandemic such as social distancing and quarantining, and then with the widespread adoption of work from home technology, spurred by the pandemic.
The Average US Home Could be Worth $382,000 by 2030
House prices in the US have risen by 48.55% in the last ten years (from $173k to $257k) and if they continue to grow at this rate for another decade, the average US home will be worth $382k by 2030.
According to a report by Zillow, home values are projected to increase by 5.5% over the next year, slower than the 16.9% increase seen in 2021. Zillow predicts that home values will increase by 3.5% in 2023, 3.4% in 2024, 3.3% in 2025, and 3.2% in 2026.
National appreciation values average around 3.5 to 3.8 percent per year. Ownerly explains that the average home appreciation per year is based on local housing market trends as well as the economy, and this makes for a great deal of fluctuation.
If house prices rise, then the wealth effect is likely to cause an increase in consumer spending. This will cause higher Aggregate Demand (AD), and it is likely to cause an increase in Real GDP and a higher rate of economic growth.
In short, the increase in home prices outpaced inflation by 3.7% overall in 2022. However, between July 2022 and January 2023, inflation outpaced housing prices by 2.5%. As the Federal Reserve interest rate changes, which has meant increases in the past year, so does inflation — and home prices along with it.
California is set to have the highest average home next decade, with a predicted price of $1,048,100 by September of 2030, if prices continue to grow at the current rate.
After falling in 2023 and 2024, home prices are predicted to plateau in 2025 before rising again at just above the rate of inflation. However, due to the spike in home values from 2020 through 2022 due to record-low mortgage rates, median sales prices will take at least until 2027 to regain the highs of mid-2022.
Home prices are predicted to fall between 7% and 10% depending on the measure, with the S&P CoreLogic Case-Shiller Home Price Index expected to drop another 8% in 2023, bringing prices to the still elevated levels of late 2021.
Although home prices are expected to improve in the second half of the year, the California median home price is projected to decrease by 5.6 percent to $776,600 in 2023, down from the median price of $822,300 recorded in 2022.
The average lifespan of a newly constructed house is 70–100 years. Factors such as weak housing materials and damaging weather exposure can shorten a home's lifespan. Routine repair and maintenance can improve the longevity of a home.
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value is important to investors and financial planners, as they use it to estimate how much an investment made today will be worth in the future.
You can determine home value by using an online valuation tool, hiring an appraiser, using a real estate agent, or checking comparable homes in your area. Using an online valuation tool or pulling comps in your neighborhood is easy and quick, but you'll receive more accurate results using a REALTOR® or appraiser.
According to Benson, a home (the physical thing we live in) doesn't actually appreciate in value. In fact, the physical characteristics of a home tend to depreciate as they age. It's the underlying property (the land your home sits on) that is actually what's gaining value.
House prices tend to rise as inflation increases. This isn't surprising: The price of most everything tends to rise when inflation is higher, and housing is no exception. The Federal Reserve Board will often try to slow inflation by increasing its benchmark interest rate.
Housing is the key to reducing intergenerational poverty and increasing economic mobility. Research shows that increasing access to affordable housing is the most cost-effective strategy for reducing childhood poverty and increasing economic mobility in the United States.
One particular benefit is the correlation of rental prices to inflation. Buying multifamily real estate is a great way to hedge against inflation because it usually appreciates along with the CPI. As rental income goes up, the value of your property increases with it.
So why doesn't CPI include house prices? Inflation is a measure of the costs of buying goods and services for consumption today. A house provides shelter and security to those who live in it, but the value of those services is dwarfed by the price of the house.
Will house prices go down in a recession? While the cost of financing a home typically increases when interest rates are on the rise, home prices themselves may actually decline. “Usually, during a recession or periods of higher interest rates, demand slows and values of homes come down,” says Miller.
How much will property prices rise in 5 years? Based on historical averages of 3.5% of home value growth per year, property prices will rise a total of about 18 to 20% in 5 years. The math is simple: 3.5% a year for 5 years, compounding annually.
Houses will be interactive and fully wireless, allowing us to access data from any point. A drive for extensive resource efficiency could see water harvested and recycled within each home. Integrated solar panels and microgen combined with ultra-thin insulation films will allow some houses to come off the grid.
Morgan Stanley: The Wall Street bank expects home prices to fall by around 10% between June 2022 and the bottom in 2024. If mortgage rates fall by more than expected, Morgan Stanley researchers say that the peak-to-trough decline will come in closer to 5%.
Housing affordability has declined over the last three decades; as of 2018, less than a third of Californians could afford a median-priced home; in job centers such as the San Francisco Bay Area, that number is less than a quarter.
Strained affordability has seen many homebuilders turn to smaller units. The Pandemic Housing Boom, which pushed national home prices up over 40%, coupled with last year's mortgage rate shock, has resulted in a deterioration of housing affordability.
The cost of buying a home is drifting further out of financial reach for the average American, according to a report from Redfin. The real estate website analyzed homes that went on sale last year and found that only 21% of them were affordable, meaning that nearly 80% of homes were outside the typical buyer's budget.
Personal homes will be almost fully independent of a dangerously overtaxed energy grid. One hundred years in the future, our houses will be, in almost all respects, semi-living, artificial organisms—closed systems with a metabolism, sensory apparatus, immune response, and an approximation to a nervous system.
Analysts believe some of the most popular cities in California could drop in price by 10% overall. In fact, new figures from Redfin show San Francisco home values have already come down 10%, year over year.
Predicting house prices can help to determine the selling price of a house of a particular region and can help people to find the right time to buy a home.
Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.
If you need to be occupying your home by a certain date to save on rent, it's a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1).
In my opinion, real estate is one intelligent option to consider in 2023, as it often has excellent returns, tax advantages and provides diversification even in the face of a challenging economic climate. Real estate also has the potential to compound your investment.
Stone and brick houses last the longest. If you are using wood, choose a hardwood for durability. A one-storey house will last longer because it is easier to maintain. Steel-frame techniques are also more durable for building houses than traditional stick-framing techniques and can last for 100+ years.
Older homes were usually built with a higher caliber of solid building materials such as stone, brick, and solid wood. For example, wood in old houses was cut from “old growth”, which has proven to be more stable, durable, and more rot-resistant than today's wood.
Foundations. Poured concrete block bases and slab foundations will last for a lifetime, 80 to 100 years or more, given they have been constructed with precision.
5. Future value (The dollar amount you will receive in the future. A standard mortgage will have a zero future value because it is paid off at the end of the term.)
Future value is what a sum of money invested today will become over time, at a rate of interest. For example, if you invest $1,000 in a savings account today at a 2% annual interest rate, it will be worth $1,020 at the end of one year.Therefore, its future value is $1,020.
Overall, it's cheaper to build a home than to buy one in California, with 13 out of the 20 counties saving you money if you decide to build your house from scratch. Budget-wise, building is more favorable in Southern California whereas Central California caters best to those interested in buying.
Buying a house gives you ownership, privacy and home equity, but the expensive repairs, taxes, interest and insurance can really get you. Renting a home or apartment is lower maintenance and gives you more flexibility to move. But you may have to deal with rent increases, loud neighbors or a grumpy landlord.
1. Redfin. The most accurate home value estimator is Redfin as it uses historical pricing data and also considers real-time demand and market trends. Redfin estimates are more accurate than Zillow, and the interface is intuitive, making it easy to find exactly what you're looking for.
How accurate is the Zestimate? The nationwide median error rate for the Zestimate for on-market homes is 2.4%, while the Zestimate for off-market homes has a median error rate of 7.49%.
If you haven't renovated your home in the past 30 years or so, it won't show well when you put it on the market. In other words, it won't get the same price as a similar home that's been maintained and updated.
Home values tend to rise over time, but recessions and other disasters can lead to lower prices. Following slumps, home values can increase in some areas of the country because of strong demand and low supply, while other areas struggle to rebound.
2% Rule. The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.
The S&P 500 index fell 19.4%, and the Down Jones Industrial Average fell 8.9%.Tech stocks were some of the worst performers, down between 22% and 66%. COVID's impact on the stock market in 2023, however, is much less severe than earlier in the pandemic, says Haworth.
Increased Housing Costs and Rent: Gentrification leads to an increase in property values, which drives up housing costs and rent. This increase in housing costs and rent can make it difficult for many people to afford to live in the area, particularly low-income families and individuals.
Conclusion: The COVID-19 pandemic adversely impacted the economics of ED care, with large drops in overall and, in particular, low-acuity ED visits, necessitating reductions in clinical hours. Staffing cutbacks could not match reduced revenue at small EDs with minimum emergency physician coverage requirements.
As a result, there is a sizable shortage of new homes after more than a decade of under-building relative to population growth, according to a new analysis from Realtor.com released Wednesday. The gap between single-family home constructions and household formations grew to 6.5 million homes between 2012 and 2022.
The pandemic was accompanied by historic drops in output in almost all major economies. U.S. GDP fell by 8.9 percent in the second quarter of 2020 (figure 3-3), the largest single-quarter contraction in more than 70 years (BEA 2021c). Most other major economies fared even worse.
Every industry suffered job losses since the start of the pandemic. Within prominent industries of the top 100 metros, the accommodation and food services industry, which includes hotels, restaurants, and similar businesses,3 suffered most, with employment dropping to 86 percent of its pre-crisis levels.
Older age. People of any age can catch COVID-19 . But it most commonly affects middle-aged and older adults. The risk of developing dangerous symptoms increases with age, with those who are age 85 and older are at the highest risk of serious symptoms.
Gentrification usually leads to negative impacts such as forced displacement, a fostering of discriminatory behavior by people in power, and a focus on spaces that exclude low-income individuals and people of color.
These special populations are at increased risk for the negative consequences of gentrification. Studies indicate that vulnerable populations typically have shorter life expectancy; higher cancer rates; more birth defects; greater infant mortality; and higher incidence of asthma, diabetes, and cardiovascular disease.
Gentrification is an ongoing, evolving process that often occurs simultaneously with rising home values and increases in property taxes. Homeowners can benefit from rising home values by selling their property and liquidating their housing wealth (the wealth effect).
The pandemic has affected the public's mental health and well-being in a variety of ways, including through isolation and loneliness, job loss and financial instability, and illness and grief.
Twenty-two million jobs were lost between February and April 2020, as the unemployment rate hit 14.8 percent. 1 The number of families receiving federal food assistance jumped 17 percent in only three months, and many households were unable to pay their rent.
As a result, the nation achieved historic gains against poverty and lowered hardship. In 2020, poverty fell by the largest amount in five decades (using the most appropriate annual measure) as a result of direct relief measures like expanded jobless benefits, Economic Impact Payments, and expanded food assistance.
The housing market's crash during the Great Recession led the industry to pull back on construction for many years, and materials and labor shortages during the height of the pandemic fueled another slowdown.
The causes of the housing supply crisis are widely understood. After the Great Recession, new home construction dropped like a stone. Fewer new homes were built in the 10 years ended 2018 than in any decade since the 1960s. By 2019, a good estimate of the shortage of housing units for sale or rent was 3.8 million.
Causes. The imbalance between supply and demand; resulted from of strong economic growth creating hundreds of thousands of new jobs (which increases demand for housing) and the insufficient construction of new housing units to provide enough supply to meet the demand.
Introduction: My name is Dr. Pierre Goyette, I am a enchanting, powerful, jolly, rich, graceful, colorful, zany person who loves writing and wants to share my knowledge and understanding with you.
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