Real Estate Home Prices and Real Estate Sales
It depends on who is looking at the real estate market!
Home Buyers would not be disappointed if home prices dropped, but are not pleased if they continue to go up.
Home Sellers would be disappointed if home prices were dropping and they could not sell their home for what they may have previously. But they are excited if home price were continuing to increase.
Are real estate home prices increasing, decreasing or are they stabilizing? What about real estate sales transactions? Are there as many Sale Transactions now as in previous months or years? Are homes still selling above asking price? Are buyer bidding wars as common as in the past year(s)? Are home sellers reducing the asking price in order to sell?
When reading and looking at real estate sales and statistics, is it Median Sale Price or Average Sale Price? How about sales? Are they closed sales or under contract(pending) sales? Are they existing homes or new homes?
Home Prices Aren’t Declining, But Headlines Might Make You Think They Are.
If you’ve seen the news lately about home sellers slashing prices, it’s a great example of how headlines do more to terrify than clarify. Here’s what’s really happening with prices.
Reports like this appear in various News Related posts on a Monthly basis.
In addition to a report like this, there are additional reports published by State REALTOR® Associations and Local REALTOR® Boards or MLS Associations which includes real estate statistical information local to the area. Of importance is the fact that real estate is Local and what’s true of the whole is not true for the parts. Yes, real estate sales and sale price statistics vary from National, State, County, Region, City, Zip Code and Neighborhood. And Yes, what is true for National Real Estate Statistics may not be similar throughout the Country.
I am currently Licensed in North Carolina and New Jersey and as such I am a Member of State and Local Realtor Associations and Multiple Listings Systems which provide Statistical Data.
North Carolina
New Hanover County
28411 in Wilmington
The bottom line is home prices are higher than they were a year ago at this time, and they’re expected to keep rising, just at a slower pace.
A recent article from Redfin notes, “Price Drops Hit Highest Level in 18 Months As High Rates Dampen Buyer Demand.” And that might make you think prices are declining. Now, while it’s true the latest report from Realtor.com also shows 16.6% of homes on the market had price reductions in May, which is up from 12.7% last May, that doesn’t mean overall home prices are falling.
The key is knowing the difference between the asking price and the sold price.
What Does This Mean for Home Prices?
So, while there’s been an increase in price reductions recently, this doesn’t mean overall home values are declining. Instead, it’s a sign that demand is moderating. And, as a result, sellers are adjusting their expectations to align with today’s market reality. Even with more price reductions, home values are still growing on an annual basis, as they do nearly every year in the housing market. According to the Federal Housing Finance Agency (FHFA), home prices went up 6.6% over the last year.
So, while seller price reductions are often a leading indicator that prices may moderate in the months ahead, which experts have been saying for a while is expected to happen, they aren’t necessarily reason for alarm. The same article from Redfin also states:
“. . .those metrics suggest sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price is up 4.3% year over year to another record high. . .”
And with inventory as tight as it is today, price moderation is much more likely in upcoming months than price declines.
Why This Is Good News for Buyers and Sellers
For buyers, more realistic asking prices mean a better chance of securing a home at a fair price. It also means you can enter the market with more confidence, knowing prices are stabilizing rather than continuing to skyrocket.
For sellers, understanding the need to adjust your asking price can lead to faster sales and fewer price negotiations. Setting a realistic price from the start can attract more serious buyers and lead to smoother transactions.
Bottom Line
While the uptick in price reductions might seem troubling, it’s not a cause for concern. It reflects a market adjusting to new conditions. Home prices are continuing to grow, just at a more moderate pace.
The above article, “Real Estate Home Prices and Real Estate Sales “, was prepared by David Fialk, Realtor Emeritus, who regularly posts real estate articles of interest for home buyers, home sellers and homeowners.
Licensed Since 1971, David Fialk is a Licensed Real Estate Broker in North Carolina (Intracoastal Realty, Wilmington 28411) and a Broker Salesperson in New Jersey (Coldwell Banker Residential Brokerage, Metuchen 08840) and has helped more than 1800 Families Move across Town… Throughout the State… and Across the Country!
Planning on purchasing real estate? Thinking of selling your home? For real estate information “You Can Rely On, Contact the REALTOR You Can Rely On”.
David can be reached via email or by phone at 910-859-0200 or at www.DavidFialk.com.
