Are you wondering if home prices are going to crash? Some people might even be hoping for a price drop to finally purchase a more affordable home. However, experts agree that’s unlikely to happen anytime soon – especially in sought-after areas like Farmington Hills homes. Here’s why.
Home Prices Are Driven by Supply and Demand
The housing market works like any other market: when demand is high and supply is low, prices rise. This dynamic is playing out across the country, including in local markets such as Farmington Hills.
According to the latest estimates, the U.S. is currently experiencing a housing shortage of several million homes. That means there are far more buyers (demand) than there are homes available (supply). This imbalance is the driving force behind rising prices. David Childers, President of Keeping Current Matters (KCM), explains it best:
“The main driving force on pricing is the limited amount of inventory in most markets across the country. That issue is not going to be solved overnight or in the next twelve months.”
How Did We Get Here?
For over 15 years, homebuilders haven’t been constructing enough homes to meet buyer demand. After the 2008 housing crisis, new construction slowed significantly, and it has only recently begun to recover.
Even though new home construction has been on the rise in recent years, builders are still playing catch-up. According to AmericanProgress.org, they are struggling to meet current demand, let alone make up for over a decade of underbuilding. This is true across the country, as well as in areas like Farmington Hills homes, where buyer demand remains strong.
As long as there’s a housing shortage, home prices are likely to remain steady or increase.
What About Next Year?
The majority of experts predict home prices will continue to rise in 2025, but at a slower, healthier pace. However, it’s important to understand that prices can vary by local market.
In areas with more available inventory, like some parts of the country, prices may grow more slowly or even decline slightly. But in places where inventory remains tight—like Farmington Hills homes and other Oakland County markets—prices are expected to keep climbing.
This is why working with a trusted Farmington Hills Realtor is essential. A local real estate expert can help you understand market conditions specific to Farmington Hills and nearby areas, ensuring you make informed decisions.
Bottom Line
If you’re wondering what it will take for home prices to come down, it all comes back to supply and demand. With inventory still limited in most markets, including in Farmington Hills, prices are likely to remain steady or rise.
As your trusted Farmington Hills Realtor, I’m here to help you navigate the current market, whether you’re looking to buy or sell. Let’s connect to discuss what’s happening with home prices in Farmington Hills and develop a plan that works for you.
Contact Your Local Real Estate Expert I’m Tom Gilliam, a dedicated Realtor in Farmington Hills, Michigan, serving Oakland County home buyers and sellers. From Farmington Hills to Novi, Northville, West Bloomfield, Wixom, Commerce, and Royal Oak, I handle all your real estate needs.
Visit my real estate website: https://homes2moveyou.com/ or call me at 248-790-5594 to get started!