The post-pandemic home value has become a hot topic as the real estate market underwent dramatic changes over the past few years. The pandemic sent home prices soaring, and despite a recent cooling in the market, home values have largely remained high. This article explores how much home values have risen since the pandemic began and what it means for homeowners and potential buyers.
The Surge in Home Equity
The pandemic fueled a frenzy in the real estate market, pushing median home prices to record highs. In June 2022, the median home price hit $449,000. Although the market has cooled due to rising mortgage rates, home prices remain elevated. As of May 2024, the national median list price was $442,500, up slightly from $441,000 the previous year. The persistent lack of homes for sale continues to keep prices high, with inventory still down 34.2% compared to typical 2017 to 2019 levels.
Cities Leading the Home Equity Boom
| Metro | May 2019 Home Value | May 2024 Home Value | Percentage Increase |
|---|---|---|---|
| Nashville, TN | $375,000 | $588,000 | 57.1% |
| Los Angeles, CA | $805,000 | $1,248,000 | 55.1% |
| Providence, RI | $380,000 | $586,000 | 54.2% |
| Austin, TX | $371,000 | $565,000 | 52.3% |
| Memphis, TN | $230,000 | $350,000 | 52.1% |
Since May 2019, several metros have experienced significant increases in home values. Nashville, TN, tops the list with a 57.1% rise, from $375,000 to $588,000. Los Angeles, CA, follows with a 55.1% increase, from $805,000 to $1,248,000. Providence, RI, saw a 54.2% rise, with home prices jumping from $380,000 to $586,000. Austin, TX, and Memphis, TN, also saw substantial increases, with home values rising by 52.3% and 52.1%, respectively.
Considerations for Sellers
While rising home values boost homeowners’ equity, selling a home comes with potential financial pitfalls, including capital gains tax. Homeowners can exclude up to $250,000 of equity gain from their income, or up to $500,000 if filing jointly with a spouse. Any profit beyond these amounts is taxable. Sellers must have lived in their home full-time for at least two of the past five years to qualify for this exclusion.
Leveraging Home Equity
Instead of selling, homeowners can tap into their home equity through a Home Equity Line of Credit (HELOC). This allows them to borrow money using their home’s equity as collateral. Lenders typically allow borrowing up to 75%–85% of the home’s appraised value, minus any outstanding mortgage balance. It’s advisable to use these funds prudently, focusing on investments and home improvements rather than luxury expenses.
Impact on Buyers
For buyers, the post-pandemic home value surge has made affordability a significant issue. Higher interest rates and elevated home prices have reduced the buying power of many potential homeowners. Some buyers may need to adjust their expectations, considering townhomes or condominiums, or multifamily homes, instead of single-family homes. However, there is a silver lining: homes priced between $200,000 and $350,000 have seen inventory growth, providing more options for budget-conscious buyers.
Post-Pandemic Home Value: Increased
The post-pandemic home value trend shows significant gains for homeowners, but it also presents challenges for buyers. Whether you’re considering selling, leveraging your home’s equity, or navigating the market as a buyer, understanding these trends can help you make informed decisions.
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