We are beginning to see reports that more housing inventory is coming to the market and that buyer demand may not be increasing at the same pace it did earlier this year. The result will be many headlines written to address the impact that these two situations will have on home values.
Many of these headline writers will confuse “softening home prices” with “falling home prices,” but there is a major difference between the two.
The data will begin to show that home values are not appreciating at the same levels as they had over the last several years (softening prices). This does NOT mean that prices are depreciating (falling prices).
Here is an example: Over the last several years, national home values increased by more than 6% annually. If you had a home worth $300,000 at the beginning of the year, it would be worth $318,000 by year’s end. If the appreciation rate “falls” to 4%, that $300,000 house would be worth $312,000 at the end of next year – a $6,000 difference.
The price of the home did not fall. It just didn’t increase at the level it had the previous year.
Appreciation rates are projected to end this year at approximately 5%, and then drop to somewhere between 4-5% next year. This drop in appreciation rate will cause home price increases to soften.
Again, this does not mean that home prices will depreciate, but instead that they will appreciate more slowly.
Be careful when reading headlines that discuss home values. Some headline writers will be legitimately confused and will use the word falling in place of softening. Others will realize that the headline “Home Prices are Falling!” will get more clicks than “Home Prices are Softening” and will intentionally write the more compelling headline. Read the article. If the word depreciation is not mentioned, home values are not falling.
Author:Brian Weinzetl Phone: 763-516-5016 Dated: September 27th 2018 Views: 183 About Brian: Brian Weinzetl is a real estate agent specializing in the Pflugerville, Round Rock and North Austin ...
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Brian Weinzetl is a real estate agent specializing in the Pflugerville, Round Rock and North Austin Areas. Brian got his start in real estate in 2012 and has a background in real estate appraisals completing hundred of appraisals while running his appraisal firm. After grasping a good concept of the pricing of homes Brian transitioned his efforts into full time real estate sales. Brian utilizes technology to help seller clients get the maximum amount of exposure for their homes. Brian also utilizes technology to help his clients locate homes before they are on the market. While technology is a helpful tool in real estate Brian prides himself on the personal relationships that he builds with his clients. Brian is marrie d to his wife Kristen and has 2 young boys.
We are beginning to see reports that more housing inventory is coming
"We are so thankful for Brian and all his hard work, whenever we found a house we liked, we would text Brian and he would get us a showing as soon as he could!! He is amazing at answering our messages and phone call! He is always happy and positive and gave us great advice! Was even great with our crazy ideas and thoughts!! Without him we would have never got our dream home!! I highly recommend him to everyone I know!!!"