buttons

Tuesday, October 30, 2018

60 is the new 85

Are Home Prices Softening or Are They Falling?

Sometimes, use of falling prices and softening prices get confused. Falling prices is pretty much self-descriptive, but softening prices simply means that home prices are not appreciating as fast as they were.

As an example, appreciation was running around 6% the last few years. Prices reached a point with that rate and have not rolled back. But, going forward, the rate of housing price appreciation is predicted by some to be only around 4 or 5% or "softening" from what they were. Returning to a more normal market is not a bad thing.


Real Estate Market Finally Getting Back to Normal?

So what is normal? As the supply side increases and demand is better fulfilled, price pressure drops. It does not mean prices roll back. It simply means prices are not appreciating as rapidly as they have been recently.

If you are a driver, experience has taught you that is you have been driving at 85 and suddenly slow down to 60, then 60 "feels" slow. 60 is not slow. A normal market is not "slow".


Competition Is Coming!

Housing market relief! As more homes come on the market and close the gap between housing inventory and buyers out there shopping, the market pressure adjusts. Not a bad thing to have a fairly balanced supply and demand - and a normal market.