Are Home Prices Really Going Down?: Debunking the Hype
Have you been watching the news and felt concerned about the future of home prices? Some experts predicted a housing market crash in 2023, which led to sensational headlines in the media. This article aims to provide you with a clear picture of what is actually happening in the real estate market.
Dissecting the Hype Around Home Prices
At the end of 2022, housing experts raised alarms about a potential crash in home prices for 2023. Media outlets caught onto this prediction, creating headlines that foretold of doom and gloom for the housing market. This flurry of negative news left many wondering about the state of the market. If the news left you questioning or delaying your own plans to move, here is what you need to know.
Home Prices Never Crashed
Contrary to the alarming headlines, the actual data reveals a different story. Home prices showed remarkable resilience and performed significantly better than the media portrayed (refer to the chart below).
This chart compiles information from three trusted sources, illustrating how prices rebounded after experiencing only slight national declines. This stands in stark contrast to the catastrophic crash scenario depicted in many articles. Things are very different than what we experienced in 2008.
The Reality of Home Prices
The minor declines that did occur, as highlighted in red, were neither severe nor long-lasting. In the words of Nicole Friedman, a Wall Street Journal reporter,
“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Although the news coverage has made a big deal about house prices going down, the slight correction has already passed. The data currently shows prices are actually slowly going back up. They are not falling anymore.
What Lies Ahead for Home Prices?
Experts unanimously agree that home price growth will persist in the coming years, gradually returning to normal market levels. This means we'll continue to see home prices increase, albeit at a more moderate pace compared to recent years, which is ultimately a positive development.
Media Influence on Public Opinion
Some media outlets may interpret this slowdown in home price growth as an impending decline and circulate stories that fuel such fears. This influence is evident in the Consumer Confidence Survey by Fannie Mae (see chart below).
While the percentage of Americans anticipating price drops had been steadily declining earlier this year, recent data shows a slight uptick in such expectations (highlighted in red). This underscores the enduring influence of media on public opinion even when the data shows prices are slowly going up.
Debunking the Hype
Don't get scared by those gloomy headlines and become part of the statistics. The data from multiple sources shows that home prices aren't going down. So, don't let the news mess with your plans to buy or sell. When life changes, you still need to make a move, but don’t let fear keep you from knowing your options. Let's connect through text or grab a bite to eat to see what your real estate goals are. Talk to you soon!
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