In a landscape where confusion reigns regarding US home prices, mainstream media’s portrayal often misses the mark.
Forbes recently suggested a decline in home prices, but the reality lies in understanding the distinction between median and real appreciation. Media typically relies on the median home price, disregarding real appreciation metrics.
To clarify, consider a scenario with five homes: when only the lower-priced ones sell, the median price drops, but real appreciation persists. It’s crucial to educate customers, dispelling media-induced fear and highlighting the current buying potential. Real data from sources like Case Shiller, FHFA, and Zillow confirm consistent home price appreciation, projected at around 5-6% for 2023.
Example: Lower Priced Homes Sell Can Falsely Reflect Home Price Appreciation Falling
Real Home Appreciation: “have continued to break through previous all-time highs per Case-Shiller”
Despite a temporary pause in late 2020, prices are rebounding, reaching previous highs. For example, January posted a seasonally adjusted 0.4% rise from December. Prices were also 6% higher than a year earlier, the fastest annual rate since 2022. This trend is set to continue, offering valuable insights for both existing and first-time home buyers.
1. Misleading Metrics
Mainstream media often relies on the median home price, failing to capture real appreciation rates.
2. Educating Customers
By explaining the difference between nominal (median) and real appreciation, we can alleviate fear and highlight buying opportunities.
3. Reliable Data
Real appreciation readings from trusted sources like Case Shiller, FHFA, and Zillow provide a clearer picture of home price trends.
4. Projected Growth
Despite temporary fluctuations, home prices are expected to continue appreciating at a steady rate of 5-6% in 2024.
5. Staying Informed
Updates from local real estate professionals can offer valuable insights for navigating the market with confidence.
By understanding the nuances behind home price appreciation, we can navigate the media narrative and make informed decisions.
