Monday Market Update: The Market Change In Perspective
It’s not just about how low prices will go, but how much they had risen prior to that.
A new read from Realtor.com starts off with a pretty grim analogy: ‘No one wants to catch a falling knife.’ The article reveals the factors that are essentially ‘freezing’ the market as we head into winter – namely rising mortgage interest rates.
Dramatic price decreases are happening most in pandemic hot spots – Phoenix, Boise and Austin to name a few. However, looking at national averages and median price drops is meaningless without context.
Realtor.com states that: “Nationally, home list prices rose 40.6% in just over two years’ time—from March 2020, when the pandemic lockdowns began, to the peak of the market this past June, according to Realtor.com data. So a 10%, 15%, or even 20% drop over a two-year span isn’t as significant as it might seem at first.”
Ali Wolf, Chief Economist of real estate consultancy Zonda, reminds us all of what our team has experienced for decades: “A really important thing to remember is housing is cyclical. We came from a massive run-up in prices, sales, demand in the housing market, and now it’s contracting. This is not new.”
Lisa Sturtevant, Chief Economist of the Bright MLS covering the mid-Atlantic region, explains that in many areas, price growth will slow but not plummet. She projects prices to lessen slightly from summer peaks but not ‘crash’ in the majority of regions.
We encourage all of our readers to end 2022 and start 2023 with plans based in facts and not fear. Take time to think and consult with trusted professionals to help you determine if this pause in the market may also mean a pause for you, or an opportunity. While the biggest benefits may exist for those whose purchasing power is not rate dependent, there are still many other strategies to consider depending on the market you live in, the number of properties you own and what your short- and long-term goals are.
Resource Used: ‘No One Wants To Catch a Falling Knife’: What To Expect in the Housing Market for the Rest of 2022
Cheers to accepting what is and looking forward to what will be,
Bobbi Decker
DRE#00607999
Broker Associate, Bobbi Decker & Associates
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
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