How do we determine the truth about home prices? Why is it some homes in places like Aspen Colorado are $1,000 psf while in some areas a comparable size home will sell for $100 psf or less?
And why do some homes sell for above listed price and others are sold below market value? Generally home prices everywhere increased in value each year from 1963 to 2007.
The average price of homes in the U.S. increased from below $50,000 in 1963 to $384,500 in 2020. Then came the 2007 housing bubble but by 2013 housing prices had returned to pre-2007 levels.
However, by 2018 nationwide housing prices had leveled off.
In 1975 every region of the country had an average home sale price of under $75,000 but by 2020 the Northeast had an average sale price of over $500,000 while the South and Midwest had an average price of just more than $300,000.
The price differential is reflected in the area per capita income and the supply and demand in the different regions.
What can we expect in 2020 and 2021? With the economic slowdown caused by the Covid-19 pandemic, coupled with the limited supply of new houses, in part a result of the 50% rise in lumber prices, you would conclude that housing would be in trouble.
However, the current interest rates at 3% for a 30 year mortgage and 2.5% for a 15 year mortgage have the housing market alive and well. Although remember the inverse relationship of interest rates to home prices. The lower the interest rates the higher the home prices.
On the Local Scene
The 5.84-acre site at ARKANSAS ROAD AND GOOD HOPE ROAD, West Monroe sold for $1,350,000 or $231,164 p/ac. The property will become the site of a new modern convenience store.
S&J FARM AND SEED has moved to a new location at the intersection of Smith Street and Washington Street, West Monroe.
Bill Roark is a Commercial Associate Broker at Tri State Properties and may be contacted by email to email@example.com.