If you're considering buying or selling a home, you're probably wondering: "What's going on with home prices?" It's not surprising that you're unsure about this since the way prices are discussed in the news can be confusing.

So here's the deal. Those folks over there are just looking at the numbers and freaking out. They're comparing this year's stats to those record-breaking years we had in the past, but c'mon, those were like unicorns - not gonna happen again. And now that prices are starting to even out, they're acting like it's all doom and gloom, scaring people about what's gonna come next. But let me tell you, the worst of the home price drops happened already. What we're witnessing now is just a return to normal, steady growth in home prices. No need to panic, my friend!

Let's break it down in a more casual way. So, you know how home prices can sometimes be all over the place? Well, let's not worry about the crazy ups and downs of the last few years because they were just abnormal. Instead, we'll concentrate on what's normal for the market. This way, understanding home price trends will be a whole lot easier!

Sure, let's dive into the topic of seasonality in the real estate market. You see, there are certain predictable patterns that occur throughout the year when it comes to buying and selling homes. Spring is the time when the market is buzzing with activity and it's the peak season for homebuyers. Things stay pretty busy during the summer, but as we start heading into the cooler months, the market tends to slow down a bit. Now, why does this happen? Well, it's kind of like supply and demand. When there are a lot of buyers looking for homes, prices tend to go up because of the high demand. So, seasonality also affects home prices, with the most significant appreciation happening when there's a lot of demand in the market.

You know, it's really interesting how things have been lately. We've had some pretty abnormal years, haven't we? But believe it or not, before all of that, there was actually a consistent trend in home prices. I've got this cool graph for you, using data from Case-Shiller. It shows the monthly movement of home prices from 1973 to 2021. The best part is, it's not adjusted, so you can see the natural ups and downs throughout the year. Take a look!

We've been crunching the numbers for the past 48 years, and guess what? At the start of the year, home prices tend to go up, but not as much as they do during the spring and summer. Why? Well, it's simple really. Not a whole lot of people are looking to move during the colder months of January and February. But once we hit the spring, things start heating up - both the weather and the housing market. More people are out there buying homes, and you can bet your bottom dollar that prices start climbing up. But as we approach fall and winter, things start to calm down again. The activity slows, and although prices keep going up, the growth isn't as rapid as before. But hey, they're still going up nonetheless.

Why This Is So Important to Understand

As we head into the next few months, the housing market is going to start following a more regular seasonal pattern. But brace yourself for some misleading headlines about home prices. You'll see terms thrown around like crazy, such as:

• Appreciation: when prices increase.

• Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.

• Depreciation: when prices decrease.

Don't get all worked up when you see those headlines about falling home prices. It's just a case of mistaken identity. You see, during the fall and winter months, it's totally normal for the rate at which home prices go up to slow down. It's not that they're actually falling, it's just that they're not appreciating as quickly as before. So yeah, don't let those headlines confuse you or freak you out. It's all part of the usual pattern - home price growth tends to slow down as time goes by. No need to worry!

Bottom Line

If you're curious about what's going on with home prices right here in our neck of the woods, we should definitely chat. Shoot me a message and let's get connected!