The Decline in Home Prices is Now in the Rearview Mirror
The 2023 Home Price Declines Are Behind Us, and It's Time To Buy
As 2023 progresses, the worst home price declines appear in the rearview mirror. With prices rising again nationally and experts predicting continued growth in the years to come, now may be the ideal time to dive back into the real estate market. Waiting could result in higher prices, while purchasing now can increase your home's value and net worth over time.
What Experts are Saying About Home Prices
It is evident from the Fannie Mae 'Home Purchase Sentiment Index' that many respondents expect home prices to decline over the next twelve months. However, the data shows that home prices have already begun to appreciate, with 70% of the 221 cities analyzed in the National Association of Realtors (NAR) Q1 report experiencing price increases.
Lawrence Yun, NAR's chief economist, said, “Prices may not continue to drop significantly as inventory remains constrained. Due to the severe inventory shortage, multiple offers are resurging, particularly for affordable homes.” Yun suggests that “Any price declines might be short-lived.”
CoreLogic's recent report supports Yun's assessment, projecting more substantial gains in the coming year due to low inventory and steady demand. NAR's report also highlights that inventory in the first quarter was 40% below pre-pandemic levels, based on figures from Q1 2019.
Zillow and Case Shiller, FHFA, CoreLogic, Fannie Mae, Freddie Mac, Black Knight, and others report that home values are experiencing appreciation, NOT depreciation.
Even Zillow has altered its projection, signifying that we are turning the corner.
Buyer activity is more robust than during the 'normal' years before the pandemic. The following graphic illustrates this point.
Home Prices on the Rise: Seize the Opportunity
Last July, home prices began to decline, causing many potential buyers to put their plans on hold, waiting to see how the market would evolve. However, the tide turned around in February, and prices began to climb back up. This upward trend is likely to continue, making it increasingly expensive to buy as time goes on.
By purchasing a home now, you can take advantage of the current prices and watch your home's value and net worth grow over the years. The longer you wait, the higher the prices may become, making finding the perfect home within your budget more challenging.
A recent CNN report emphasizes that while home prices are generally witnessing an upward trend across the nation, certain individual markets have experienced a decline in prices compared to the previous year. The recent influx of layoffs within the tech industry may have adversely impacted the housing demand on the West Coast, particularly in Northern California. However, the Southern California market remains relatively stable, with Los Angeles experiencing a modest 1.7% decrease in prices. Despite the slight decline, numerous properties in Los Angeles continue to receive multiple offers, indicating an upturn in the market.
Furthermore, the latest CoreLogic S&P Case-Shiller Index reveals that home price gains are maintaining stability in several major metropolitan areas on the East Coast. This steady performance can be attributed to employees returning to physical office spaces and a resurgence in buyer demand in regions that experienced comparatively lower appreciation during the pandemic. Additionally, markets in the southern regions of the United States demonstrate resilience, primarily due to their affordability in comparison to other areas within the country.
The fluctuations in home prices, both declines, and increases, are strongly influenced by local factors. This is why it's crucial to familiarize yourself with local market data and trends to make the most informed decision tailored to your needs.
Consult a Local Real Estate Expert: Make an Informed Decision
Los Angeles Latest Real Estate Index for Single-Family-Residence
Now could be the perfect time if you've been waiting for the right moment to return to the real estate market. To make sure you make a well-informed decision, you will need to contact a local real estate expert who can offer insights and advice tailored to your specific needs. Here's why:
Expertise in Local Market Trends: Local real estate experts understand the nuances of your area, which can be invaluable when making such an important decision. They can help you navigate the market and make strategic choices based on current trends.
Access to Exclusive Listings: Local agents can access properties that may not be publicly listed, giving you a competitive edge when searching for your dream home.
Personalized Guidance: Real estate professionals can provide personalized advice based on your unique situation and needs, ensuring that your home purchase aligns with your financial goals.
Skilled Negotiation: An experienced agent can negotiate on your behalf, securing the best possible deal and saving you thousands of dollars.
Streamlined Process: A local expert can simplify the complex process of buying a home, guiding you through each step and ensuring a smooth, stress-free experience.
Conclusion
The worst of the home price declines are behind us, and with prices on the rise, waiting to buy could cost you more in the long run. By purchasing a home now, you can capitalize on the current market conditions and watch your home's value and net worth grow. The volatility of the real estate market is undeniable, and having an expert by your side to provide reliable data is crucial for making well-informed decisions with confidence. Don't miss out on this opportunity – reach out to us today to discuss your options and make a well-informed decision about your next move.