If you’ve been considering buying a home, but have been waiting for home prices to fall before doing so, I’ve got good news!!

Your day has arrived!! Or has it?

While it’s true that home prices are down from their peak, and talk of year-over-year price declines will soon be all over the media, home prices in Frisco and Prosper are actually holding steady and there are currently no signs they will fall much further, if at all.

How can that be?

Watch the following video, or continue reading below, to learn more;

Year-Over-Year Price Declines

As mentioned above, fairly soon, there will be a lot of reports, and discussions in the media, about falling home prices, and a lot of potential homebuyers are likely to get very excited, but things are not always as they seem.

Now, I’m not trying to suggest that prices haven’t come down, or won’t fall further in the future, but want to provide some perspective so you have a clear understanding of exactly what’s happening in our local real estate market.

I think we can all agree that the real estate market of the past three years has been anything but normal.

At the onset of the pandemic, there was widespread belief and speculation that the housing market would crash. It didn’t. In fact, the opposite happened. Pandemic-driven demand caused home prices to surge, especially in the second half of 2021 and the first part of 2022 as a frenzied market of multiple offers and bidding wars pushed home prices to dizzying heights.

It was an unsustainable situation that was brought to an end by rapidly rising mortgage rates.

Home prices peaked in April 2022 in Frisco and May 2022 in Prosper. As mortgage rates pushed higher through the summer of 2022 buyer demand evaporated and home prices declined.

By August 2022, the median sales price in Frisco had fallen 17% and 13% in Prosper. Since then, prices have actually been fairly flat, going up a little, down a little, up more at the end of the year, then down again in January,

Here is how the median list price of homes in Frisco has changed since 2018;

From the graph above, you can clearly see the rapid increase in home prices experienced between mid-2021 and mid-2022.

Although prices did fall in 2022, the decrease isn’t anywhere close to the amount of the increase. Saying that, if you imagine the current trend line extending out fairly flat, it won’t be long before the year-over-year pricing numbers go negative, even though current home prices are remaining relatively flat.

Going Forward

Couldn’t home prices fall again in the future?

It’s absolutely possible that they could, but highly unlikely the gains of the past couple of years will be erased.

Why?

Inventory. Demand for housing here in North Texas continues to be greater than the available supply. Although the headlines have been dominated by stories of how many more homes for sale there is this year, compared to last, total inventory continues to fall.

Here’s a look at how the inventory of homes for sale has changed since 2018;

Although there are more homes for sale overall now compared to this time last year, look at how many fewer there are when compared to 2018 and 2019.

Normally, this time of year we see inventory start to build as we head into the busy spring season, but inventory here in Frisco continues to fall and there were actually fewer homes listed for sale this past week than the same week a year ago.

To keep track of this data yourself, consider signing up for my weekly market report. The report is available for any city/zip code of interest to you and allows you to see how the market is performing with information that is updated weekly. Here is a link to the complete Frisco Market Report.

Bottom Line

A home not far from me went up for sale recently and went under contract within a week after receiving multiple offers. Now, I don’t expect we will see a return to bidding wars, but talk of multiple offers is once again starting to become more common.

The continued imbalance between supply and demand means it is unlikely we will see any further significant declines in local home prices are many new construction communities are already starting to raise prices as new phases are released.

My new spring homebuyer and seller guides have recently been released. Download a copy today then let’s schedule a call to see if now might be the right time for you to consider buying or selling a home.

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