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What Can You Expected for Home Prices?

If you’re thinking about buying or selling a home soon, you may have questions about what’s happening with prices right as the market cools. The simple answer is that the real experts don’t expect prices to come crashing down, but the level of home price moderation will depend on factors like supply and demand in each local market.

That means, moving forward, home price appreciation will continue to vary by location, with more significant changes happening in overheated areas. Here’s a quick snapshot of what the experts are saying:

Danielle Hale, Chief Economist at realtor.comsays: “The major question on the minds of homeowners and aspiring buyers alike is what will happen to home prices. . . Soaring prices were propelled by all-time low mortgage rates which are a thing of the past. As a result, home price growth is expected to continue slowing, dipping below its pre-pandemic average to 5.4% for 2023, as a whole.

According to Mark Fleming, Chief Economist at First American: “House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.”

Taylor Marr, Deputy Chief Economist at Redfin, says: For those bearish folks eagerly awaiting the home price crash, you’ll have to keep waiting. As much as demand is pulling back supply, it is also reducing downward pressure on prices in the short run.”

On Cape Cod, the median sales price for a single family home is up 1.4% comparing this November to a year ago. Prices were up 12% comparing November 2021 to November 2020! Year to date median sales prices are still up almost 22%, but the trend is stabilizing.

What Does This Mean for You?

If you’ve been playing the “waiting game” for prices to continue to increase (sellers) or decrease (buyers), time may be running out.

Potential sellers should know that Open Houses aren’t the social events that they were and, in general, bidding wars are a thing of the past. The number of days a property stays on the market is increasing, too, as are price reductions as sellers try to get the price their neighbors or friends got six months ago.

Buyers, who are hoping for prices to drop, are losing out. Some have told us that they’re waiting for interest rates to drop. They have been ticking back and the difference between 5.25% and 5.50% may not be as significant as you think, when you remember your mortgage is for 30 years and refinancing is always an option. (We’re never going to see 3% again…)

If you don’t have a relationship with a reputable lender, we can recommend several whom we have worked with over the years. It’s important to have that pre-approval letter and know how changes in interest rates impact what you can afford.

If 2023 is going to be you year and you have questions about what’s happening with home prices, let’s connect at 508-360-5664 or msennott@todayrealestate.com so we can share with you the latest information on what’s happening.

Talk soon…

Mari and Hank

What’s Next for Home Prices

As the housing market cools in response to the rise in mortgage rates, home price appreciation is slowing as well. If you’re following the headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. 

But what’s true? What’s most likely to happen moving forward?

While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections, so you have the best information available today.

What the Experts Are Saying About Home Prices Next Year

The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends:

What’s Ahead for Home Prices? | MyKCM

As the graph shows, the three blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The red bars on the graph are experts calling for home price depreciation.

While there isn’t a clear consensus, if you take the average (shown in green) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year.

What Does This Mean?

Basically, experts are divided on what’s ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.

Prices vary from market-to-market and parts of the country. We’re friendly with colleagues in our business from across the country and watch them market homes for $450,000.00, for example, that would fetch $650,00.00 or more here.

What’s not going to happen is a dramatic drop in prices that some buyers are waiting for. No reputable expert is predicting the “crash” that would allow that to occur.

The good news is home prices are expected to return to more normal levels of appreciation rather quickly. The latest forecast from Wells Fargo shows that, while they feel prices could drop slightly in 2023, they also think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of 4% annual appreciation.

And the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show, even if prices decline slightly next year, it’s not expected to be a lasting trend.

As Jason Lewris, Co-Founder and Chief Data Officer for Parcl, says: “In the absence of trustworthy, up-to-date information, real estate decisions are increasingly driven by fear, uncertainty and doubt.”:

As “Prof Hank” explained in a recent video posted to our YouTube channel, the media is not your best source of information.

So, don’t let fear, uncertainty or misinformation change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, let’s connect.

Please consider subscribing to our YouTube channel where we post up-to–date information for buyers and sellers that is pertinent to where we live. Or let’s chat at 508-360-5664 or msennott@todayrealerstate.com.

As we’ve mentioned before, we sold and bought earlier this year, so we had many of the same questions and concerns as homeowners as you might have. We’re happy to share with you what we learned as homeowners, as well as our perspective as real estate professionals.

Let’s talk soon…

Mari and Hank