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Stay Informed: Navigate Home Price Headlines Wisely, Avoid Surprises

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If you’re contemplating a real estate transaction, you’re probably wondering about the current state of the home price trends. The confusion often arises from sensationalized headlines that compare today’s data with the exceptional ‘unicorn’ years when prices soared to unsustainable levels.

It’s crucial to recognize that these comparisons are misleading. The market is now returning to a more normal pattern of home price appreciation. To gain a clearer understanding of this trend, let’s focus on the typical market behavior, excluding the anomalies of recent years.

First, let’s talk about real estate seasonality. The housing market experiences predictable ebbs and flows throughout the year. Spring is the peak homebuying season, marked by high demand, while summer remains active. As the cooler months approach, activity naturally decreases, affecting home prices.

Before the abnormal years, there was a consistent long-term trend in home prices. The graph below illustrates unadjusted data from Case-Shiller, spanning from 1973 to 2021, revealing the inherent seasonality:

48 Year Average Monthly Home Price Movement

In a typical year, home prices show growth at the beginning of the year, albeit less than during the spring and summer. This is because the market is less active in the colder months. As spring arrives, demand surges, leading to more significant price increases. In the fall and winter, the market slows down, resulting in a deceleration of price appreciation, but prices still typically appreciate.

Understanding this pattern is crucial because you’ll encounter headlines that may misinterpret or misrepresent what’s happening with home prices in the coming months. These headlines may use terms like ‘appreciation,’ ‘deceleration of appreciation,’ or ‘depreciation’ to describe price changes.

It’s important not to be confused or fearful when you see headlines about a ‘deceleration of appreciation.’ This is a typical part of the market’s seasonal rhythm, where price growth naturally slows as the year progresses.

If you have questions about local home prices or need further clarification, don’t hesitate to reach out. Linda Craft Team Realtors is here to provide you with accurate and informed insights into the real estate market.

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