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Sell! Buy! Mortgage Rates!Attention grabing headlines can be very destabilizing for buyers and sellers in today's real estate market. One of the biggest concerns for potential homebuyers and sellers is prices; are they going up, coming down' do you see inventory increasing; these are questions we hear almost everyday. Amidst the barrage of news headlines, it's really important to approach reports with the proper context. Let's explore the misconceptions surrounding home prices and why it's crucial to understand the concept of seasonality in real estate. By focusing on the market's normal seasonal trends and avoiding alarm caused by big headlines, we believe you'll be better equipped to navigate the housing market.
The Anomalous Years
Have you heard of what is considered "The Unicorn Years" in the media? The media often compares our present market conditions with the "unicorn" years when home prices reached record highs that were unsustainable. These comparisons are misleading and fail to account for the normalization that necessarily follow these conditions. Home price declines are a natural result and are, at this moment, behind us. We are witnessing a return to more sustainable levels of home price appreciation and steady growth in value.
Tis the Season in Real Estate
Seasonality plays a significant role in shaping price trends. Throughout the year, predictable ebbs and flows occur, with spring being the peak homebuying season when the market is most active. Summer also sees strong activity, but it tends wanes as cooler months approach. Frequently home prices mirror this seasonality as they appreciate the most when demand is at its peak, but when you have a market like the Research Triangle Park that was arguably underpriced since the early 2000's and which has been seeing ever increasing amounts of both people and business relocating here, these seasonal flows become less significant. Where a real estate market has a strong job market, and the lifestyle is desirable, then there is sustained demand year round. It is important for buyers and sellers to understand the local market conditions above all else when considering their purchase. Below is a chart showing the current "Active" Listing on the Market in the Research Triangle by month and below it a chart showing homes that reduced their listing price here in the Research Triangle
Long-Term Home Price Trends
By analyzing data from the past 48 years, the typical monthly movement of home prices from 1973 through 2021, without adjusting for seasonality, shows a trend towards higher home prices at the beginning of the year, in the spring and summer months, whereas prices ease in fall and winter. Overall, in the present climate, homes continue to appreciate in value. These are long term and reliable indices, that buyers and sellers should be aware of.
Why Buy or Sell Now, or Not Now
In the coming months, as the housing market adheres to its predictable seasonal rhythm, we anticipate a surge in headlines that may skew a long term trend in home prices. You may see terms like "appreciation," "deceleration of appreciation," or even "depreciation" when describing price movements. However, do not confuse these terms with long term slowing of home value or home price growth. Understanding this distinction is essential in interpreting news reports accurately and making informed decisions regarding real estate.
When it comes to understanding home prices and their trends, it's important to consult a local Realtor and to approach media headlines with a critical mindset. As Realtors, we navigate the housing market's seasonal fluctuations confidently, remembering that deceleration of appreciation during the fall and winter months is entirely normal. If you have questions or concerns about local home prices, don't hesitate to reach out and connect with My NC Homes. We offer decades of experience and can provide accurate insights and guide you through the process. It is a great time to buy or sell in the Research Triangle Park, let us strategize with you.
Posted by Larry Tollen on
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