Are home prices continuing to go up or are they coming down?

If you’re confused by what seems like conflicting reports about home prices you’re not alone.

While out with friends this past weekend, I was asked “how can the media report home prices are increasing when I see price reductions on homes for sale happening all around me?”

If you’ve been wondering the same thing watch the following video, or continue reading below, and I’ll break down exactly what’s happening with home prices and what it means to you if planning on buying or selling a home.

With headlines talking about home price appreciation happening at the same time we are seeing an increasing number of price reductions no wonder people are confused.

Part of the challenge arises from the fact that home price appreciation is usually tracked annually while there are often fluctuations in home prices month to month in every market. Prices are usually higher in the spring than they are in late fall and winter.

It’s also important to understand the different terms being used to describe the housing market;

  • Appreciation is when home prices are increasing

  • Depreciation is when home prices are decreasing

  • Deceleration occurs when home prices continue to appreciate but at a slower pace

Currently, we are seeing all three of these happen at the same time here in Frisco and Prosper (could it get any more confusing🤪)

Here is a look at the 3-year median sales price trend in Frisco;

The market in Frisco peaked in April 2022 with a median sales price of $760,000. In August 2022, the median sales price was $639,000, a decline of 16% from April’s peak.

However, the median sales price in August 2021 was $560,000, so even though the market is down from its peak in April, home prices are still 14.1% higher than they were a year ago.

The situation in Prosper is much the same as shown on the following median sales price trend line;

Unlike Frisco, the market in Prosper peaked one month later in May 2022 with a median sales price of $926,000. Just like Frisco, the median sales price has come down 16% from the peak and was $780,000 in August 2022.

The median sales price in August 2021 was $665,000 so the market is still up 17.3% year-over-year.

In both Frisco and Prosper, home prices continue to appreciate year-over-year, but the pace of appreciation continues to decelerate from what we were experiencing. At the same time, prices are depreciating month-over-month from the peak experienced earlier this year.

Looking Forward

When you look back over the last several years 2020 and 2021 were an anomaly, to say the least. Home prices soared due to the massive imbalance between supply and demand caused by artificially low mortgage rates, pandemic-driven demand due to working from home, and years of being undersupplied.

If we were to remove 2020 and 2021 from the housing trend lines and put 2022 against 2019 a completely different picture appears that shows the housing market returning to pre-pandemic norms.

Saying that nobody knows for sure what the future holds.

Looking at the latest economic data for North Texas, continued growth fueled by corporate relocations, migration, and new household formation is expected to continue. As a result, home prices are forecast to continue appreciating, but at a moderated pace in the low single digits.

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Home Buyers

Without a doubt, rising mortgage rates and soaring home prices have made it less affordable to buy a home now than a year ago.

On the bright side, home prices are moderating while multiple offers and bidding wars are few and far between. Additionally, increased inventory means you have more options to choose from and don’t have the pressure of having to submit an offer within hours of a home being listed.

In an effort to stay ahead of the curve, new home builders have reduced prices on many homes and are offering some nice incentives as well, including lower mortgage rate options and closing cost assistance. Email me at Andrew@TheAndrewSmithTeam.com if you’d like additional information on current builder incentives.

Home Sellers

The days of receiving multiple offers and having your home sell for tens of thousands over the asking price are gone, but homes are still selling.

The key is to make sure your home shows well and is priced correctly. Looking at what sold 60 days ago as a guide won’t work in the current market. You need to position your home correctly to attract the most interest and don’t want to be in a position of chasing the market down.

Curious about what your home might be worth in today’s market? CLICK HERE to find out INSTANTLY


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