Are Home Prices Depreciating Or Just Stabilizing In Today's Market?
Don Pelletier
With over 36 years as a professional Realtor, and the 2,200 San Diego home sellers and buyers Don has represented, he has a long-standing tradition an...
With over 36 years as a professional Realtor, and the 2,200 San Diego home sellers and buyers Don has represented, he has a long-standing tradition an...
So, what is actually happening with home prices today?
This is the question I am most often asked. It seems to be on everyone’s mind who is thinking about selling or buying a home.
Nationally, depending on the local market, there is still ongoing home appreciation, even though at the same time, sellers, in many markets, like ours, where prices surged 46 percent, in just two years, are reducing the price of their homes. This leaves buyers and sellers confused about what is really going on in the market. Let’s break down the three terms used in the industry by experts to better clarify what is actually happening today.
Appreciation is when home prices increase. Depreciation is when home prices decrease. Deceleration is when home prices continue to appreciate, but at a much slower pace. In today’s housing market, experts are saying nationally we are in a market of deceleration. Home prices continue to appreciate, but at a much slower pace than previous years. This is primarily driven by the ongoing shortage of available homes for sale, in many markets across the country. This means we are not seeing the record-breaking appreciation we have seen in 2020 and 2021.
According to CoreLogic, in 2021 home prices appreciated by an average of 15% nationwide. This year, experts are seeing a decelerated pace of 10-11%. Of course, in certain select markets, you may see declines more drastic. However, when we look at what is going on in the country, on a national level, the projection from the experts is home prices will not depreciate significantly.
However, that said, a lot will depend on what the Feds do with interest rate hikes-and that will be directly correlated to inflation, and how they are able to control that, from the current levels. Higher inflation means higher interest rates, and that lack of affordability could likely have a negative on home prices.
As always, it is best to connect with a very experienced local realtor to get specific market updates on home prices in your area.
Whether you want to sell your existing home, buy your first home, upsize, downsize, purchase a vacation home, or just talk about options, a real estate professional is your best source for information based on current trends in our area. If you're interested in learning more about the 2022 real estate forecast, don't hesitate to reach out - we're happy to help!