While single-family home values are enjoying dizzying highs, experts aren't predicting a massive correction in the style of the Great Financial Crisis.
Single-family home prices are up 18% year-over-year as of November 2021, but prices are "nowhere near" the "extreme mispricing" of 2005, according to a new analysis from Amherst. There's also more of an even split of overvalued and undervalued markets today versus in 2005, and the level of overvaluation is lower.
Amherst researchers also predict that a very tight supply of single-family home sales inventory will continue to drive pricing. The total stock of for-sale inventory started this year 21% below 2020 levels, and the inventory gap widened to -29% by March 2021. And while year-over-year declines have remained steady at around 17%, supply is historically tight.
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