Why Working with a Realtor Always Beats Reading News Headlines
Dropping prices. Market correction. Housing crash. The headlines are enough to make anyone panic.
It’s one of the main reasons to enlist the help of a Realtor. In an uncertain housing market, a local real estate professional can help you sift through all the noise. They can use their industry and local market insight to educate and to help you truly understand what you need to know.
If the headlines have you feeling anxious, here are three housing market myths debunked (or more fully explained) by actual real estate professionals.
3 Housing Market Myths…and Why They’re Wrong
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Myth 1: Expect Housing Prices to Plummet
When there’s uncertainty in the housing market, current homeowners worry about one thing: Will the price of my home drop?
Reading the housing headlines is enough to have you biting your fingernails and pulling out your hair…especially if you’re considering selling your home in the near future.
Much of this headline-induced anxiety comes from the nuance of terminology, though. When articles talk about the immediate impact on housing prices, they might use terms like “appreciation” and “depreciation.” Respectively, this means an increase or decrease in a home’s value.
Another key term to watch for is “deceleration.” This is a slowdown in how quickly a home appreciates value.
This last term is particularly appropriate to this housing market. As Selma Hepp, deputy chief economist at CoreLogic, explains, “higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
In plain English? Home prices will continue to rise. Just not as fast.
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Myth 2: We’re in a Housing Market Correction
First things first. Let’s define our terms again. What exactly is a “correction”?
Forbes has this to say: “A correction is a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.”
With housing values projected to continue appreciating (just at a decelerated pace), that means we’re not in or entering housing correction territory.
What experts are saying is that growth is going to be moderate compared to the last couple of years. Considering these last few years have been absolutely record-shattering, this shouldn’t come as a surprise.
What can current and potential homeowners expect to see? Home appreciation will likely start to return to more historically normal pre-pandemic rates of growth.
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Myth 3: The Housing Market Is Headed toward a Crash
If you just read the headlines, you’d think the housing market was about to look a little something like this…
A bursting bubble is a dramatic image, and many still remember the devastation of the 2008 housing market crash. Anything that remotely hints at a repeat of that period in real estate gets people understandably nervous.
But this (2022) is not that (2008).
“As recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter,” said Logan Mohtashami, lead analyst at HousingWire. “This typically happens in a recession, however, the notion that credit lending in America will collapse as it did from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom in the period between 2008–2022.”
Another plain-English translation: it’s not as easy to get a mortgage today as it was before 2008.
Lending standards are much stricter today. Those who currently have mortgages are more qualified. This makes today’s housing landscape very different from what led to the historic crash fourteen years ago.
Housing Market Conditions Got You Confused? Uncertain? Worried?
Then it’s time to reach out to a local real estate professional!
Whether you’re looking to buy or to sell, working with a DMV real estate agent can help you make sense of what’s really happening in this market…and how to use it to your advantage.
Reach out today to discover real estate as it should be!
