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    Home Prices: What Happened in 2020? What Will Happen This Year?

    The real estate market was on fire during the second half of 2020. Buyer demand was way up, and the supply of homes available for sale hit record lows. The price of anything is determined by the supply and demand ratio, so home prices skyrocketed last year. Dr. Lynn Fisher, Deputy Director of the Federal Housing Finance Agency (FHFA) Division of Research and Statisticsexplains:

    “House prices nationwide recorded the largest annual and quarterly increase in the history of the FHFA Home Price Index. Low mortgage rates, pent up demand from homebuyers, and a limited housing supply propelled every region of the country to experience faster growth in 2020 compared to a year ago despite the pandemic.”

    Here are the year-end home price appreciation numbers from the FHFA and two other prominent pricing indexes:

    The past year was truly a remarkable time for homeowners as prices appreciated substantially. Lawrence Yun, Senior Economist at the National Association of Realtors (NAR), reveals:

    “A typical homeowner in 2020, just by being a homeowner, would have accumulated around $24,000 in housing wealth.”

    What will happen with home prices this year?

    Many experts believe buyer demand will soften somewhat as mortgage rates are poised to bump up slightly. Some also believe the inventory challenge will ease as more listings come to market this year.

    Based on this, most forecasters anticipate we’ll see strong appreciation in 2021 – but not as strong as last year. Here are seven prominent groups and their projections:Home Prices: What Happened in 2020? What Will Happen This Year? | MyKCM

    Bottom Line

    Home price appreciation will be strong this year, but it won’t reach the historic levels of 2020. Let’s connect if you’d like to find out what your house is currently worth in our local market.

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    Danny Cheung

    I spent almost thirty (30) years with the Department of Defense in hardware/software design, development, operations, maintenance, and program manager before joining the Group in a full-time capacity. I am thrilled to put my years of experience as an Electronics Engineer and Program Manager to assist and lead our Real Estate Group to the next level. I am committed to establishing the tools and resources necessary for our team members to work more seamlessly and effectively, thus ensuring our clients' satisfaction. My wife and I have two daughters and a dog (he’s more like our son). I enjoy traveling and watching sports, especially football…Go Skins!

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