What Does the Future Hold for Home Prices?

If you’ve been following the real estate market at all, chances are you’ve heard about today’s rising home prices, not just here in Volusia County, but nationwide. And while this increase in homes is great news for sellers today, you may be wondering what’s going to happen in the future. Will prices continue to rise with time? Or are we going to see a crash?

 To answer that question, let’s first understand a few terms you may be hearing right now: Appreciation, Depreciation, and Deceleration. In the most simple terms:

  1. Appreciation is when an asset increases in value.

  2. Depreception is when an asset decreases in value.

  3. Decelectation is when something happens at a slower pace.


It’s important to note that home prices have appreciated- or increased in value- for 114 straight months. To find out if that trend may continue, we always look to the experts. Pulsenomics, which is an independent research firm, surveyed over 100 economists, investment strategists, and housing market analysts, aka the experts, and asked for their 5 year projections. The experts say the market may see some slight deceleration but not depreceition. So, in other words, we don’t expect to see home values decrease, we just expect to see the value to increase at a slower pace in the future. For example, nationally, home values increased at 11.7% last year, next year experts estimate 5.8% appreciation, 3.9% appreciation by 2023 and 3.5% by 2025. It’s also worth noting that we’ve seen a much higher rate of appreciation here locally- a roughly 17% increase in home values over the last year. 

So what does deceleration mean for you?

Basically what the experts are projecting is the housing market will get more in line with historical norms of appreciation. Prior to Covid, the average annual appreciation was 4.1%, so we’re expecting to see appreciation at a level that's more aligned with what we’d see in a normal year. 


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