5-Year Home Appreciation Projections
There is understandably some consumer fear in regard to future home values. With sale prices skyrocketing over the last couple of years, no one wants to find themselves underwater, or owing more than their home is worth, before they've even had a chance to settle in. Even worse? Watching their home’s value depreciate over time. But fear not, future property buyers of Maine. New data from some of the nation’s most knowledgeable tells us that the future looks good when it comes to real estate value. [Insert sighs of relief here.]
Let me skip to the good part for those of you with no time to spare:
Home values are expected to continue to appreciate over the next 5 years.
I already know what you’re thinking and you can stop worrying about year 6 right now. This survey was only looking ahead for 5 years. There is no data supporting a sudden decline in value come year 2027. [Insert second deep breath here.]
For the data geeks that want all of the deets:
Pulsenomics, an independent research firm, just released the latest Home Price Expectation Survey. In this national survey, they polled over 100 economists, market analysts, investment strategists, and other real estate experts regarding their projections on home valuations. When you average the expert responses, year-over-year appreciation values net out to:
2022 = 9%
2023 = 4.74%
2024 = 3.67%
2025 = 3.41%
2026 = 3.57%
So how might that look in actual dollars? I’m so glad you asked!
Take an example of a home purchased for $360,000 in January of 2022.
By 2027, the projected value of that home would have increased to $456,342.
That’s a whopping $96,342 of equity gained in just 5 years!
If you use the example of a home purchased for $611,479 (the average sale price of a single-family home sold in Portland, Maine within the last 3 months), equity gained over 5 years would equate to $163,643.
That’s some serious wealth-building, folks.
I hope this information lessens some of the fear out there. It doesn’t change the competitiveness of today’s real estate buying landscape or the fact that flexibility, persistence, and a good real estate agent will be your best friends in your home search, but my hope is that concern over depreciating values will no longer stop prospective buyers from purchasing their dream home (because it’s fake news, friends!). Real estate remains a solid investment and a pillar for growing your household wealth.
ABOUT THE AUTHOR:
Faith Irek, Sales Agent, REALTOR®, Breakwater Realty Group Co-Founder
Faith grew up on an equestrian farm outside of Portland, Maine and returned to the state after graduating from the University of New Hampshire with a Business degree. She brings over 17 years of high-level marketing and digital management experience to her real estate career and enjoys creating effective and creative promotional campaigns that support Maine homeowners in the sale of their property. Faith is equally as devoted to finding her buyer clients homes that they both adore and feel safe in, and is committed to a client-forward approach that leaves no stone unturned in pursuit of the best deal possible.
Faith resides in Falmouth with her family. She enjoys live music, kayaking, golf, and is learning to both refinish furniture and to not kill her houseplants (one of which is far easier than the other!). She will drop everything to pet a dog and will never pass up an opportunity to visit a county fair. She is the former Corporate Vice President of the Hugh O'Brian Youth Leadership Maine chapter and enjoys finding new opportunities to support her neighbors in need of a helping hand.
207.233.8177 // faith@breakwaterrealtygroup.com