Are Real Estate Prices Up? Or Are They Down? Omg...

are real estate prices up? or are they down?
This week's top headlines

Extreme Wind Gusts Drove Maui Wildfires Causing Billions of Property Destruction

Maui's wildfires disrupted life for thousands of people when flames damaged or destroyed homes starting this past Tuesday...
 
Home Price Gains Recorded in Many U.S. Metros in Mid-2023
Almost 60% of U.S. metro markets (128 out of 221) registered home price gains in the second quarter of 2023...
 
Mortgage demand drops again after FHA loan interest rate hits 21-year high
Mortgage interest rates soared across the board last week, with the rate on the government’s low down payment option increasing to the highest level in 21 years...
 
There will be a lot of office spaces converted into residential living
We will soon see an uptick in repurposing commercial real estate....

 

Hey gang,
 
You may have heard that real estate prices went up this year, which led many pundits to declare the housing market correction officially over!

 

...yeah it doesn't work that way Michael, you can't just "declare" it's over :o|

Yes it's true that prices went up this spring.

That's actually true every spring... even in the spring of 2007 and 2008.

It's in the fall and winter months that sellers are generally less optimistic and start reducing prices / listing lower. 

What's concerning to me about this year's spring season increases is that they were far less than the last several years:


 


and as you can see, we're already into the seasonal decline.

Part of this has to do with the seasonality, other factors include the homebuyer demand, which is the lowest it's been in the last several years:


 


This is also reflected in the mortgage application count, which is the lowest it's been since 1995:

 


And I'm guessing this news comes as a complete surprise to you... amiright?

 


For most of history the price of owning is usually slightly lower than the price of renting, hence some sort of incentive to deal with all the joys of homeownership.

In the past, appreciation was a nice cherry on top of the monthly cost savings vs rent.

But in the last several years, homeownership has been twisted into something that only the "elite" can afford to do, and you end up spending more than you would to rent because your house will go up 100,000% in 3 days so it's all worth it right?

.....right?????


 


Even as recent as 2021 on average it still cost less to own than to rent, but as you can see from this "this can't be real" graph, we're so far off from that we're gonna need a taller graph...

 


So to answer your original question, "are real estate prices up or are they down?", the answer is they're on a seasonal decline, but will the low inventory headwind be enough to bump us up in a significant way next spring?

I guess we'll see


As always, my promise to you each and every week is to act as your personal assistant and help you understand what's happening in the world of real estate.

If there's something you'd like me to include in a future newsletter, please let me know!

until next week!

-realtor josh

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