During the fourth quarter of last year, some housing experts projected home prices were going to crash in 2023. The media ran with those forecasts and put out headlines calling for doom and gloom in the housing market. All of this negative news coverage made a lot of people have doubts about the strength of the residential real estate market. As a result, they put whatever plans they had on hold.
If the news made you question if you should delay your own move, here’s what you really need to know.
Home Prices Never Crashed
Contrary to what we saw in the headlines, the actual data shows home prices were remarkably resilient and performed far better than the media would have you believe. The graph below uses reports from three trusted sources to clearly illustrate how the prices have already rebounded after experiencing only slight declines nationally. That’s a far cry from the crash so many articles predicted.
The declines that did happen (shown in red), weren’t drastic but were short-lived. As Nicole Friedman, a reporter at the Wall Street Journal, says: “The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Even though some media coverage made a big deal about home prices pulling back, the slight correction that happened is already in the rearview mirror. In fact, this data shows that home prices are actually going back up.
What’s Next for the Market?
The consensus from experts is that home price growth will continue in the years ahead and is returning to normal levels for the market. That means we’ll still see home prices appreciating, albeit at a slower pace than in the last few years – and that’s a good thing.
News outlets may see home price growth slowing and put out stories that make you think prices are falling again. These misleading headlines have an impact on how homebuyers feel about the marketplace. The graph below illustrates how these sources affect general opinion in the Consumer Confidence Survey from Fannie Mae.
While the percentage of Americans who think prices will fall has been slowly declining this year, the latest Consumer Confidence data indicates that’s ticked back up recently (shown in red). This change is surprising especially since the home price data shows prices are going up, not down. It tells you the impact the media still has on public opinion.
Even though the media may make things sound like everything is headed in a poor direction for the housing market, the data shows home prices aren’t on the decline. So, don’t let the headlines scare you or delay your plans. Eric and Sharla Stafford of Stafford Family Realtors can help you cut through the noise. Give us a call. We would be happy to chat about what is really happening in our community and around the Lake Minnetonka Area.