Where Are Home Values Headed Over the Next 12 Months?

As shelter-in-place orders were implemented earlier this year, many questioned what the shutdown would mean to the real estate market. Specifically, there was concern about home values. After years of rising home prices, would 2020 be the year this appreciation trend would come to a screeching halt? Even worse, would home values begin to depreciate?

Original forecasts modeled this uncertainty, and they ranged anywhere from home values gaining 3% (Zelman & Associates) to home values depreciating by more than 6% (CoreLogic).

However, as the year unfolded, it became clear that there would be little negative impact on the housing market. As Mark Fleming, Chief Economist at First American, recently revealed:

“The only major industry to display immunity to the economic impacts of the coronavirus is the housing market.”

Have prices continued to appreciate so far this year?

Last week, the Federal Housing Finance Agency (FHFA) released its latest Home Price Index. The report showed home prices actually rose 6.5% from the same time last year. FHFA also noted that price appreciation accelerated to record levels over the summer months:

What are the experts forecasting for home prices going forward?

Below is a graph of home price projections for the next year. Since the market has changed dramatically over the last few months, this graph shows forecasts that have been published since September 1st.

Where Are Home Values Headed Over the Next 12 Months? | MyKCM

“Between May & July 2020, national prices increased by over 2%, which represents the largest two-month price increase observed since the start of the index in 1991.”

Bottom Line

The numbers show that home values have weathered the storm of the pandemic. Let’s connect if you want to know what your home is currently worth and how that may enable you to make a move this year.


Urban to Suburban Lean

Congratulations Dave and Gulmira! After 14 years in Cleveland Park, DC it was time for more space and a sprawling yard. Despite the challenges of Covid-19, three rejected offers, a rent back and a short time rental they ended up with the perfect house and location for them. Thank you for trusting me to facilitate listing one home and buying the next.

Cleveland Park, DC to Kensington, MD – view listings

Two New Surveys Indicate Urban to Suburban Lean

There has been much talk around the possibility that Americans are feeling less enamored with the benefits of living in a large city and now may be longing for the open spaces that suburban and rural areas provide.

In a recent Realtor Magazine article, they discussed the issue and addressed comments made by Lawrence Yun, Chief Economist for the National Association of Realtors (NAR):

“While migration trends were toward urban centers before the pandemic, real estate thought leaders have predicted a suburban resurgence as home buyers seek more space for social distancing. Now the data is supporting that theory. Coronavirus and work-from-home flexibility is sparking the trend reversal, Yun said. More first-time home buyers and minorities have also been looking to the suburbs for affordability, he added.”

NAR surveyed agents across the country asking them to best describe the locations where their clients are looking for homes (they could check multiple answers). Here are the results of the survey:

  • 47% suburban/subdivision
  • 39% rural area
  • 25% small town
  • 14% urban area/central city
  • 13% resort community/recreational area

According to real estate agents, there’s a strong preference for less populated locations such as suburban and rural areas.

Real Estate Brokers and Owners Agree

Two New Surveys Indicate Urban to Suburban Lean | MyKCM

Zelman & Associates surveys brokers and owners of real estate firms for their monthly Real Estate Brokers Report. The last report revealed that 68% see either a ‘moderate’ or ‘significant’ shift to more suburban locations. Here are the results of the survey:

Bottom Line

No one knows if this will be a short-term trend or an industry game-changer. For now, there appears to be a migration to more open environments.


Real Estate Persists Being About People And The RElationships Built.

Four years ago Jacob and Amanda relocated to the DMV area for a work opportunity with every intention of going back to their home state of Michigan. Despite not knowing their timeline as to when they could go home, they knew it was better to buy versus rent. To be a a small part in their larger plan, a facilitator to the purchase of their home and now selling it, has been rewarding. Their hard work and careful planning is paying off. They are on their way home. With only three day on the market, they received an offer over list price and stand to walk away with a return on their investment.

Under Contract: 20432 Summersong Lane Germantown, MD 20874
​Link to listing | Virtual Tour Link
Bedrooms: ​2​ | Full Bath: ​3.5​ | Sq. Feet: ​1594


Pending Home Sales Notch Record-Setting 44.3% Monthly Increase in May

A Historic Rebound for the Housing Market

A Historic Rebound for the Housing Market | MyKCM

Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?

According to NAR, the Pending Home Sales Index (PHS) is:

“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”

In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.

Why is this rebound important?

A Historic Rebound for the Housing Market | MyKCM

With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:

“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”

But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:

“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”

A Historic Rebound for the Housing Market | MyKCM

As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.

Bottom Line

If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.


SOLD: Why Working With An Experienced Listing Agent Is So Important.

There’s only so much sellers can control, the key is adjusting to the things they can’t. An agent’s true value is helping a seller navigate one to minimize the other. So what happened with Vaughn Landing? It closed 7 months and 3 contracts later. A three year old townhouse with one past owner in Germantown, MD, conveniently located, minutes from MARC station, highways and shopping.

The seller had gone through all the listing steps to prepare the townhouse for market. They priced it well, given its meticulous condition, market trends at the time and comparable units.

  • The first contract was ratified in 12 days after initially listing it. The buyer decided he wanted to live somewhere else (that is what I was told) and he walked on the home inspection.
  • The second contract, despite having a gainfully employed buyer, a lender letter saying income had been verified and finances run through the mortgage lenders DU (document underwriter) system, the buyer was denied financing due to insufficient funds.

Nothing the seller had done or not done landed him in this situation. What is the best strategy in this scenario?

  • Accept that there are several moving parts to a real estate transaction and no one controls the entire process.
  • Circle around to the very first consideration of step # 3 of the sales process keeping in mind the time already on the market.
  • Work with the information/feedback your agent has collected to decide what adjustments, if any need to be made and when to put it back on the market.
  • Remember time is of the essence.

Sellers, It Doesn’t Have to Feel Like You’re Venturing Into The Unknown

Like Frozen II’s theme song “Into The Unknown”, the process of selling your home can feel like it’s shrouded in fog and even considering selling can be overwhelming. It’s been non-stop singing in my household since seeing it. (don’t worry, no spoilers here) But seriously, if you’re considering selling your home follow Elsa and Anna’s example and don’t go it alone. You don’t need to. Hiring a real estate professional who has a finger on the pulse of the market will make your selling experience a positive and educated one.

Let Laurel Murphy Real Estate guide you through the home selling process. Things to Consider When Selling Your House. Download a Sellers Guide

Contact me for an in depth consultation.


Veteran Home Owner