I totally get it if you're a bit confused about what's going on with home prices. It's kind of a mess right now. There are still some folks out there claiming that prices are dropping, but the truth is, the data says otherwise. The thing is, a big part of the confusion comes from people getting their info from sketchy sources. Not only that, but some media outlets are spinning the data in ways that don't actually reflect what's happening. Crazy, right?

Okay, let's make things easy to understand. Here's the important information you can rely on, based on real and trustworthy data.

Normal Home Price Seasonality Explained

Ah, the housing market! It goes through its ups and downs every year, you know. We call it seasonality. Spring is when things really heat up and people go crazy buying homes. Summer is still a busy time, but you can feel things starting to slow down as the cooler months creep in. It's like a wave, you know? It comes and goes.

Did you know that home prices tend to rise and fall depending on the time of year? It's all because of supply and demand. When there's high demand for homes, prices go up. And when demand is low, prices go down. This creates a reliable long-term trend in home prices. If you take a look at the graph below, you can see the average monthly percentage change in home prices from 1973 to 2022. The data is from Case-Shiller, and it's not adjusted for seasonal factors, so you can see how prices fluctuate throughout the year.

When we look at the data, we see that home prices tend to go up at the start of the year, but not by as much as they do during the spring and summer. And you know why? It's because the housing market is not as busy during January and February. Not a lot of people are moving during the colder months, so there's not as much demand. But when we hit spring, oh boy, things pick up! The peak homebuying season kicks into high gear, and that's when we see home prices shoot up a lot more in response. It's like everyone comes out of hibernation and starts looking for their dream homes. As fall and winter roll in, prices still go up, just not as fast. The market slows down again, and activity eases. So, that's basically how it goes throughout the year.

This Year, Seasonality Has Returned

Now, let’s look at how this year compares to that long-term trend

I've got the latest data for this year from the same source. Just like last time, the dark bars show the long-standing trend. The green bars, on the other hand, represent what's been going on this year. Take a look! The green bars are starting to match up with what's considered normal in the market. That's a positive sign because it means we're seeing more sustainable price growth compared to what we've seen in the past few years.

Simply put, house prices are not actually going down across the country. It’s just that the rate at which prices are increasing is starting to level out. Going forward, there's a possibility that the media might twist this slowdown in price growth and portray it as prices dropping. It's important not to believe everything you read in the headlines. To truly comprehend what's going on, take a look at the data provided here. If you come across something in the news that doesn't make sense, don't just assume it's true. Instead, reach out to a reliable real estate professional and get more information from them.

Just wanted to remind you that it's normal for the growth in home prices to start slowing down as the year progresses. But don't worry, it doesn't mean that home prices are dropping. They're still going up, just at a more reasonable and steady pace. No need to panic!

Bottom Line

Just wanted to give you the lowdown on the current state of home prices in our area. They're finally getting back to their usual seasonal patterns, which is a positive sign. So, if you've got any burning questions about what's happening with prices around here, feel free to hit me up! Let's chat and get you all the information you need.