Home Values Rise Even as Median Prices Fall
Recent headlines have been buzzing about the median asking price of homes dropping compared to last year, and that’s sparked plenty of confusion. And as a buyer or seller, it’s easy to assume that means prices are coming down. But here’s the catch: those numbers don’t tell the full story.Nationally, home values are actually rising, even if the median price is down a bit. Let’s break down what’s really happening so you can make sense of the market without getting caught up in the fear the headlines create.Homes on the Market Right Now Are SmallerThe biggest reason for the dip in median price is the size of homes being sold. The median price reflects the middle point of all the homes for sale at any given time. And that’ll be affected by the mix of homes on the market.To show you how this works, here’s a simple explanation of a median (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median (the middle one) is 10 cents. If you have two nickels and one dime, the median is now five cents. In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change. The same is true for housing.Right now, there’s a greater number of smaller, less expensive homes on the market, and that’s bringing the overall median price down. But that doesn’t mean home values are declining.As Danielle Hale, Chief Economist at Realtor.com, explains:“The share of inventory of smaller and more affordable homes has grown, which helps hold down the median price even as per-square-foot prices grow further.” And here’s the data to prove it. Price Per Square Foot Is Still RisingOne of the best ways to measure home values is by looking at the price per square foot. That’s because it shows how much you're paying for the space inside the home.The median asking price doesn't take into account the size of different homes, so it may not always reflect the true value. And the latest national price per square foot data shows home values are still increasing, even though the median asking price has dropped (see graph below). As Ralph McLaughlin, Senior Economist at Realtor.com, explains:“When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.” This means that while smaller homes are affecting the median price, the average home’s value is still rising. According to the Federal Housing Finance Agency (FHFA):“Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.” So, while headlines may make it sound like prices are crashing, you don’t have to worry. With a closer look and more reliable data, you can see that prices are still climbing nationally.But it’s important to remember that home prices can vary by region. While national trends provide a big-picture view, local markets may be experiencing different conditions. A trusted agent is the best resource to explain what’s happening in your area. Bottom LineThe decrease in median price is not the same as a decrease in home values. The median asking price is down mostly due to the mix of smaller, less expensive homes on the market.The important thing to focus on is the price per square foot, which is a better indicator of overall market value—and those prices are still going up. If you have questions about what home prices are doing in our area, feel free to reach out at Aurhomes Group.
Secrets To Selling Your House Quickly
Seeing your house sit on the market without any bites is the ultimate frustration. And unfortunately, some sellers are in that tricky spot today.According to data from the National Association of Realtors (NAR), the average time a house spends on the market has increased over the past few years (see graph below): A recent post from Realtor.com notes a similar trend:“During the week ending Sept. 14, homes stayed on the market eight days longer compared to last year. With more choices available and mortgage rates expected to fall, buyers are taking their time, which means sellers will need to be patient and flexible.” Some of that is because inventory has gone up, so buyers have more options. And higher mortgage rates have definitely slowed demand over the past two years, and that’s out of your control. But here’s the secret. There’s something you can control – it's also where those other sellers missed the mark. They didn’t work with the right agent.Make no mistake, with the right strategy and agent partner, your house can still sell quickly, even today.If time matters to you, you need to partner with an agent who understands this shifting market. That agent will be your go-to resource on what buyers are looking for right now, and how to position your home to hit the mark.Here are just a few tips a great real estate agent will walk you through. They may seem simple, but advice like this can make all the difference.1. Competitive Pricing: One of the most critical factors in selling your home quickly is setting the right price. A local real estate agent will do a competitive market analysis by reviewing recent sales and current listings for your area. Then, they’ll use that data to make sure your home is priced accurately for today’s market. This strategic pricing approach is the best way to make sure you’re hitting the sweet spot on price. If you don’t lean on an agent for this, it can really slow your process down. As U.S. News says:“. . . setting an unrealistically high price with the idea that you can come down later doesn’t work in real estate . . . A home that’s overpriced in the beginning tends to stay on the market longer, even after the price is cut because buyers think there must be something wrong with it.” 2. The Home’s Condition: Homes that are well maintained, have great curb appeal, and are updated with modern finishes tend to sell faster. So, if speed is a priority, make sure your house makes a great first impression. An agent is a key resource on what buyers will be looking for if staging is worthwhile, and what repairs you need to tackle before you list. Ramsey Solutions offers this advice:“In the spirit of selling your home fast, take care of things now that will be a problem in the closing process. Talk to your agent about fixes you’ll need to make to pass the home inspection, like plumbing problems, roof damage, electrical issues, HVAC glitches. . . These are issues you’ll be expected to take care of before any buyers close on your house—you might as well get ahead of the game to help your home sell faster.” 3. Incentives and Extras: If you want to stand out from those other homes on the market, offering incentives or concessions, like help with closing costs, a home warranty, or including additional items (like appliances or furniture) with the sale can sweeten the deal for buyers. A real estate agent can suggest the right incentives to offer based on current market conditions and buyer expectations, so you can close the sale even faster. Bottom LineSelling a home quickly in a shifting market requires a strategic approach and an in-depth understanding of what buyers want. That’s why partnering with a local real estate agent is so important. As Forbes says:“When time is of the essence, you can’t afford to take a chance on an inexperienced housing professional. Instead, you’ll want to work with a real estate agent who knows your market and has helped sellers in your situation before.” Let’s connect at Aurhomes Group to make sure you’re set up for success.
Why Buying Now May Be Worth It in the Long Run
Should you buy a home now or should you wait? That’s a question a lot of people have these days. And while what’s right for you is going to depend on a lot of different factors, here’s something you’ll want to consider as you make your decision.As soon as you buy, you’ll start gaining equity. And you’d be surprised how quickly that can add up – even with more moderate home price appreciation.Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts project prices will continue to rise nationally through at least 2028 (see the graph below): While home prices are going to vary from one local area to the next, this shows they’re expected to keep going up nationally. The size of the increase varies from year to year, but the important takeaway is that prices are forecast to rise every single year – just at a moderate pace.And while rising home prices may not sound great right now, once you own a home, that growth will be a big bonus for you. Here’s a look at what you stand for in terms of gaining equity-wise once you buy. The graph below uses a typical home’s value and those HPES projections to show how much equity is at stake: If you bought a $450,000 home at the beginning of this year, based on that starting value and the expert forecasts from the HPES, you could gain more than $90,000 in household wealth over the next five years. That’s significant.So, if you’re ready and able to buy, and growing your wealth is important to you, you’ve got an opportunity in front of you. And now that mortgage rates have fallen, it may be time to consider making a move.To talk more about your options and what makes sense, lean on a pro. They’ll be able to tell you what home prices are doing in your area and what that means for your move (and your future equity). The Mortgage Reports says:“Given the intricacies of the current market, it’s more important than ever to stay informed and up to date about housing market conditions. Whether you’re looking to buy or sell in the remaining months of 2024, having a professional guide you through the process can make all the difference.” Bottom LineThe decision to buy now or wait is a very personal one, but it’s valuable to have an expert’s perspective. They won't push you, but they will explain things you may not have considered, like the equity that’s at stake.If you want help weighing your options and thinking through how the current market factors in, let’s connect at Aurhomes Group.
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