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August 2022

The number one real estate question on the minds of owners, buyers, sellers, investors and agents is: will home values go down in the coming months? Reading media reports can be confusing with economists and other pundits often making conflicting predictions.

There are many factors influencing home values, including mortgage interest rates, inflation, tax policy, consumer sentiment, and the overall economy. However, the key factor that determines home values is supply (a.k.a. inventory) and demand. If supply exceeds demand home values fall, if demand exceeds supply, home values rise. An extreme example of this was the Greater Boston housing market in the first half of 2022. Demand far exceeded supply leading to massive bidding wars, which resulted in a dramatic rise in home values.

There is a simple way to have a method of predicting the near term future of home values. The best method is to look at the inventory trend. If inventory is increasing values will likely fall and if supply is decreasing values will likely increase. If you are interested in an inventory report from MLS for your town please contact me

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