Higher Prices?

By
Real Estate Agent with Keller Williams Realty Evolution - Topsfield, MA 92593-B

We live in crazy times

I still say, 3 or so years ago we all went to bed and while sleeping we were secretly transported to Bizarro World, a world where everything we had grown accustomed to was thrown in a bag, shaken up, and tossed like dice. 

Just the other day I saw a news piece that said mortgage applications had fallen to a 22-year low. Inventory is still low and could be getting lower and interest rates are rising, BUT home prices are still appreciating.  At some point, I would think the "normal"  business cycle would bring about an easing in prices. But, I must remember that NORMAL is just a setting on your dryer. Now I've heard banter suggesting maybe we should discuss 50-year mortgages. Talk about servitude.

In the article below we see some experts' opinions on whether prices will rise or fall. Personally, my experience has been that prices go up and prices go down. 

Whatever takes place, it is beyond our control. So, get with your local Real Estate Professional to make plans to discuss your housing needs and how to approach the process in Bizarro World...lol

Think Home Prices Are Going To Fall? Think Again

Think Home Prices Are Going To Fall? Think Again

Over the last two years, the rate of home prices appreciated at a dramatic pace. While that led to incredible equity gains for homeowners, it’s also caused some buyers to wonder if home prices will fall. It’s important to know the housing market isn’t a bubble about to burst, and home price growth is supported by strong market fundamentals.

To understand why price declines are unlikely, it’s important to explore what caused home prices to rise so much recently, and where experts say home prices are headed. Here’s what you need to know.

Home Prices Rose Significantly in Recent Years

The graph below uses the latest data from CoreLogic to illustrate the rise in home prices over the past year and a half. The gray bars represent the dramatic increase in the rate of home price appreciation in 2021. The blue bars show home prices are still rising in 2022, but not as quickly:

Think Home Prices Are Going To Fall? Think Again | Keeping Current Matters

You might be asking: why did home prices climb so much last year? It’s because there were more buyers than there were homes for sale. That imbalance put upward pressure on home prices because demand was extremely high, and supply was record low.

Where Experts Say Prices Will Go from Here

While housing inventory is increasing and buyer demand is softening today, there’s still a shortage of homes available for sale. That’s why the market is seeing ongoing price appreciation. Mark Fleming, Chief Economist at First Americanexplains it like this:

“. . .we’re still well below normal levels of inventory and that’s why even with the pullback in demand, we still see house prices appreciating. While there is more inventory, it’s still not enough.”

As a result, experts are projecting a more moderate rate of home price appreciation this year, which means home prices will continue rising, but at a slower pace. That doesn’t mean prices are going to fall. As Selma Hepp, Deputy Chief Economist at CoreLogicsays:

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

In other words, even with higher mortgage rates, moderating buyer demand, and more homes for sale, experts say home price appreciation will slow, but prices won’t decline.

If you’re planning to buy a home, that means you shouldn’t wait for home prices to drop to make your purchase. Instead, buying today means you can get ahead of future price increases, and benefit from the rise in prices in the form of home equity.

Bottom Line

Home prices skyrocketed in recent years because there was more demand than supply. As the market shifts, experts aren’t forecasting a drop in prices, just a slowdown in the rate of price growth. To understand what’s happening with home prices in your area, connect with a local real estate professional today

Posted by

I pray that God our Father and the Lord Jesus Christ will be kind to you and bless you with peace

2 Thessalonians 1:2

 

Doug Dawes REALTOR®, AWREP, LMC

Broker Sales Associate

KELLER WILLIAMS REALTY - Topsfield/Newburyport

49 Main Street
Topsfield, MA 01983
 978-887-3995  ~ Office
 978-270-3037  ~ Cell
 DougDawes@KW.com

Comments (12)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi Doug... through June many of our neighborhoods continued to see increases in home prices and even record high prices.

Jul 22, 2022 08:27 AM
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs

Great Blog for you on Friday. Have a great Summer and year.

Jul 22, 2022 08:53 AM
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Thanks for sharing Doug!!!

Home prices skyrocketed in recent years because there was more demand than supply. As the market shifts, experts aren’t forecasting a drop in prices, just a slowdown in the rate of price growth.

Jul 22, 2022 09:02 AM
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Hi Nina Hollander, Broker I have noticed that in your neighborhood updates. It seems that the Charlotte, NC area is still on fire

Jul 22, 2022 11:30 AM
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Well, thank you Eric Bouler I hope things don't get too hot and humid in New Orleans. I remember being down that way when I was in the military. It was almost as hot and humid as Vietnam

Jul 22, 2022 11:31 AM
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I am not in complete agreement with these talking heads quoted in this article Sham Reddy CRS I do think prices will fall at some point...they always do

Jul 22, 2022 11:34 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Doug, the last couple of years have been SO different, and quite frankly, glad the frenzy has ended.    It was hard on everyone.    Our prices have slowed, but have not gone down.

Jul 29, 2022 11:07 AM
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Some homes are still going for over asking Joan Cox yet, many are staying on the market for longer. Now, I'm beginning to hear some talking heads indicating foreclosures are up. The Fed isn't done diddling around and for certain they will continue to be wrong in their approach

Jul 29, 2022 12:34 PM
Roy Kelley
Retired - Gaithersburg, MD

This is very good information to share with prospective home buyers and  home sellers.

Some seniors are deferring downsizing plans. The value of their homes go going up faster than the value of their retirement accounts.

Jul 30, 2022 06:07 AM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Great post, thanks for sharing. You made me think about this:
I've come to realize "normal" is just what we get used to, but it's always temporary. 
I've enjoyed the last 3 years, best of my career, so in a way, after 3 years, it is a my normal market - but now it's changing again! 

Aug 07, 2022 07:03 AM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Doug Dawes - like many other words, I do believe the word normal has a completely different meaning because of the shake-up in these crazy times. Not only crazy but hazy too. My advice to others regarding having a mortgage is to not exceed your limit, don't even go to your limit, live within your means and pay off that mortgage as quickly as you can. Do not be beholding to the Bank or any type of government loans. 

I liked your blog post very much. Educating the public is a great idea. 

Aug 09, 2022 06:35 AM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Inventory, like musical chairs. When less to pick from, you suck it up and climb out of the rent rut. There is always a market, always demand to buy, sell, trade up or down Doug Dawes . Building your own place? Back in time, folks rounded up family and friends to get it weather tight and slowly constructed as time and money allowed. Think many have the skills to pull off that exercise? Or have local lenders that would allow it in this age of bundle it up, sell off the paper on the secondary mortgage market?

Sep 15, 2022 10:50 AM