Home Appreciation in St. Augustine
If you’re thinking about buying a home, you want to know the decision will be a good one. And for many, that means thinking about what home prices are projected to do in the coming years and how that could impact your investment.
This year, we aren’t seeing home prices fall dramatically. As the year goes on, however, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. Experts project a return to a steadier rate of price appreciation in the years that follow.
The only thing that is certain is uncertainty. However, Florida, in general, and St. Augustine, specifically, are poised to remain popular markets for years to come. Florida is home to 11 of the 125 most populous cities and 11 of the fastest growing cities in the United States. No state income tax in the Sunshine State keeps things looking bright for everyone from business owners to retirees. St. Augustine continues to be one of the hottest real estate markets in Florida. Why? It comes down to simple supply and demand. With only a finite number of homes that can fit along the waterfront and even less residential space in the historic downtown area, there is always demand in the Ancient City.
Home Price Appreciation in the Years Ahead
Over 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they believe will happen with home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.
The big takeaway is experts aren’t forecasting a drastic fall in home prices nationally, even though some markets will see home price appreciation while others may depreciate. And when they look further out, they see steady price appreciation in the long run. That’s a great example of why homeownership wins over time.
As of February 2023, St. Augustine home prices had risen 2% compared to the previous year, for a median price of just north of $400,000. Not a bad statistic when taken in context of rising interest rates over that same period of time. If you’re looking for more data, the average home in St. John’s County has appreciated 18% over the last ten years.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above.
In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term.
Bottom Line
According to the experts, while we may see slight depreciation this year, home prices are expected to grow over the next five years. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) are projected to grow.
