Home Prices ARE Dropping...
Home prices are dropping!!! However… there is more to this story. If you are hearing the news talk about price drops and real estate agents saying that home prices are still going up, you are probably confused. Look at the data. On the market right now, there are homes that are currently listed with price drops! Locally we have seen the numbers of properties with price drops go from an average of 20% to 27%! That is a 7% increase in the number of price drops over a 2 week period. But this isn't just happening in Arkansas, the number of price drops around the country is going up fast!
So home prices ARE going down. The media is not wrong.
Then you might be asking yourself, "Then why are agents saying that home prices aren’t going down?" and that is a great question. This is why the news vs what is actually happening is so confusing right now. When agents say "home prices are not going down" what agents are talking about is the overall home values. Right now, there are a lot of properties listed at the top of the market with what we call "aspirational sales prices". And that was find when they were the only homes on the market but now, as housing inventory begins to increase, the sellers have to be more competitive with either price or condition. Most sellers will pick price rather than update or upgrading their home before they sell so, it makes sense that we are seeing an increase in price decreases (so the media is not technically wrong). We are also seeing that home values are still elevated compared to last year and even compared to last month. And these home values are predicted to continue to go up while sellers become more competitive on the market vs new inventory that is hitting the market daily.
So, even though you might see a short increase in the number of price decreases, as the market continues to adjust, you can be sure that real estate will still be an inflationary hedge and home VALUES will continue to increase.