Is a Pricing Correction on the Horizon?

Are home prices expected to drop soon? Here’s what you need to know.

 

When will we see a housing price correction? If you’ve been reading the news, most recent media headlines have been about housing prices stalling, falling, or cooling. Is a pricing correction soon to happen, or is it already happening? Today I’ll share my answer to this question.

According to experts, home prices will not decrease. They are expecting the rate of appreciation to slow down instead. Historically, real estate has appreciated 4% year over year. During 2008, the housing crisis caused an economic crisis, eventually leading to a 20% pullback in home prices nationally. 

The current economic and housing market conditions are very different from the housing crash in 2008. Our strong price appreciation in the last few years was driven by stimulus money, additional liquidity, and a historically strong job market — not by manufactured loans, unlike in 2008. This means that there is nothing to indicate that housing prices will collapse. 

Most experts predict 4% to 7% housing price appreciation over the next year. Due to interest rates rising dramatically in the first half of this year, home affordability has taken a hit. If you’re a buyer, it’s tough to see house prices and interest rates increase, but the good news is that interest rates have softened during the summer. As inflation tapers into the winter months, interest rates will continue to soften slightly.
 

“There is nothing to indicate that housing prices will collapse.”

 

As my favorite saying goes, “Marry the house, date the rate.” Now that inventory has increased during the summer, the house that you love may become available. You may not like the rate that you’re locked in, but you can always refinance in the future once rates go down. 

The best time to buy a home was 20 years ago; the second best time is now. Your home will be worth more in the future than what you paid today. Even those who bought from 2006 to 2008 have tons of equity because the housing market eventually corrects itself. 

If you have more questions about this topic or have any real estate concerns, don’t hesitate to call or email me. I’m always happy to help!

What’s Happening in Our Market?

Here’s what you need to know about our different housing markets.

What’s happening in the housing markets we serve? The San Diego, Houston, Tucson, and Austin market statistics from September are in, and we can’t wait to share them with you. After, there is a very important piece of market wisdom we learned recently that could really make or break your buying or selling plans.

You can listen to our full market breakdown in the video above or skip to each topic using the timestamps provided:

0:00 — Introduction

1:23 — How are our markets changing?

3:21 — Prices remain strong in our markets

4:43 — How much are home prices going to fall?

6:08 — Homeowners have tons of equity, and supply remains relatively low

8:38 — Home sales are down but still high

10:56 — Affordability is getting worse

13:01 — There’s a lot of uncertainty in our market

14:46 — Is it still a good time to buy a home?

17:34 — The options of where our market is heading

19:00 — If the economy takes a turn, there’s no point in waiting

22:30 — Wrapping things up

If you have questions about this topic or anything else, please call or email us. We are always willing to help!