A Real Estate Professional Helps You Separate Fact from Fiction

By
Real Estate Broker/Owner with The Real Estate Agency (Office License: 265417) 317824

A Real Estate Professional Helps You Separate Fact from Fiction

 

If you’re following the news, chances are you’ve seen or heard some headlines about the housing market that don’t give the full picture. The real estate market is shifting, and when that happens, it can be hard to separate fact from fiction. That’s where a trusted real estate professional comes in. They can help debunk the headlines so you can really understand today’s market and what it means for you.

Here are three common housing market myths you might be hearing, along with the expert analysis that provides better context.

Myth 1: Home Prices Are Going To Fall

One piece of fiction many buyers may have seen or heard is that home prices are going to crash. That’s because headlines often use similar, but different, terms to describe what’s happening with prices. A few you might be seeing right now include:

  • Appreciation, or an increase in home prices.
  • Depreciation, or a decrease in home prices.
  • And deceleration, which is an increase in home prices, but at a slower pace.

The fact is, experts aren’t calling for a decrease in prices. Instead, they forecast appreciation will continue, just at a decelerated pace. That means home prices will continue rising and won’t fall. Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

“. . . higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Myth 2: The Housing Market Is in a Correction

Another common myth is that the housing market is in a correction. Again, that’s not the case. Here’s why. According to Forbes:

“A correction is a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.

As mentioned above, home prices are still appreciating, and experts project that will continue, just at a slower pace. That means the housing market isn’t in a correction because prices aren’t falling. It’s just moderating compared to the last two years, which were record-breaking in nearly every way.

Myth 3: The Housing Market Is Going To Crash

Some headlines are generating worry that the housing market is a bubble ready to burst. But experts say today is nothing like 2008. One of the reasons why is because lending standards are very different today. Logan Mohtashami, Lead Analyst for HousingWire, explains:

“As recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter. This typically happens in a recession, however, the notion that credit lending in America will collapse as it did from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom in the period between 2008-2022.”

During the last housing bubble, it was much easier to get a mortgage than it is today. Since then, lending standards have tightened significantly, and purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash.

Bottom Line

No matter what you’re hearing about the housing market, trust the experts and partner with a local real estate professional. When you do, you’ll have a knowledgeable authority on your side that knows the ins and outs of the market, including current trends, historical context, and so much more.

Source: Keeping Current Matters | The KCM Crew 07292022

Comments (5)

Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Every day is a new day and with it comes surprises.  Real Estate is no different.   Thank you for your well written post ... a good explanation for every buyer and seller who is concerned about what they are hearing.  We are in a challenging time, for sure.  And all of us need to be ready to encourage our clients with the facts.

Jul 30, 2022 07:38 AM
Anne Corbin
Long and Foster - Lake Anna - Spotsylvania, VA
Serving Lake Anna & Central Virginia

The market is changing and the market expert is your real estate agent. Get the facts for your area market is the important piece of advice an individual should focus on. Thanks for the reminder.

Jul 30, 2022 09:25 AM
Eric P. Thompson
Premier Properties - Sarasota, FL
Sarasota, Florida

Jennifer. Great advice. Thank you. :) 

Aug 02, 2022 09:20 AM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Well researched and easy to read blog!   Buyers and sellers have to realize that if they are actively in this market, the conditions are different everywhere and condition, location also make a big difference.

Aug 02, 2022 01:43 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent information.   The rear view mirror is definitely working overtime with many buyers and sellers.  The sentiment of a housing crash is fresh on buyers and sellers minds.  It is frustrating when the home buying public consensus isn't entirely accurate!   Great post!

Aug 03, 2022 01:42 PM