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Understanding the Real Story of Home Prices: A Positive Outlook

Thursday, May 18, 2023   /   by Darcy Miller

Understanding the Real Story of Home Prices: A Positive Outlook

In today's fast-paced world, staying informed about the latest news and developments is crucial, especially when it comes to the housing market. However, headlines can often be misleading, leading to unnecessary worry and confusion. The truth is, the current narrative surrounding home prices isn't as dire as it seems. By examining the latest data, we can uncover a much more positive story and gain a clearer understanding of what's happening at a national level.

A Tale of Two Halves: Taking a year-over-year perspective, it becomes evident that home prices have remained positive, albeit with a slower rate of appreciation compared to the peak of the pandemic. To delve deeper into market trends, analyzing monthly data is essential.

Examining the monthly graphs based on recent reports from reputable sources, we can see that the worst declines in home prices are already behind us. Instead, prices are on the path to recovery at a national level. The detailed monthly view reveals a tale of two halves in the housing market over the past year.


 

In the first half of 2022, home prices were on an upward trajectory, reaching their peak in June. However, in July, prices began to decline, as indicated by the red portion in the graphs. Fortunately, by around August or September, the downward trend stabilized. The most recent data for the early part of 2023 shows a promising rebound, with prices starting to tick back up. As we enter the busier spring season, monthly changes in home prices are gaining momentum.

Encouraging Signs and Expert Insights: While it's important to note that one to two months of data don't establish a long-term trend, the fact that all three reports show stable prices is encouraging for the housing market. The month-over-month data offers a clear consensus that a national shift is underway. In essence, home prices are beginning to rise again.

Andy Walden, Vice President of Enterprise Research at Black Knight, shares his perspective on home price trends. He highlights the significant change that has occurred, stating that just five months ago, prices were declining in 92% of major U.S. markets. However, as of March, prices have risen in 92% of markets compared to February.

Selma Hepp, Chief Economist at CoreLogic, attributes this positive turn to the limited supply of homes available for sale. She explains that in many large metros, prices have shown signs of a turning point, with the U.S. recording two consecutive months of monthly gains. The rebound in home prices emphasizes the scarcity of inventory in the current housing cycle.

What This Means for Buyers and Sellers: For sellers who have hesitated to list their homes due to concerns about declining prices, it's time to reconsider. The latest data suggests a turn in their favor, and partnering with a real estate agent to list their house could yield positive results. Sellers no longer need to put their plans on hold.

Buyers who have been waiting for the right time to enter the market can now breathe a sigh of relief. The data indicates that things are looking up, providing peace of mind for those worried about purchasing a property that may decrease in value. Buying now allows them to take advantage of the current upward trajectory of home prices, positioning themselves to own an asset that typically appreciates over time.

Conclusion: If you've been cautious about making decisions related to home prices due to the negative headlines, it's essential to understand that the worst is already behind us. The data reveals a national upward trend, indicating that home prices are on the rise. To gain a comprehensive understanding of the local market, it is advisable to connect with a real estate expert who can provide insights tailored to your specific area. By staying informed, you can make informed decisions and navigate the housing market.



 

Miller Team | Castillo Real Estate
Paula Miller
6518 Sherry Lane
St. Augustine, FL 32095
904-833-5859

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