No Worries Home Prices Coming In For A SOFT Landing

Dated: March 11 2019

Views: 171

Image title


Home prices have appreciated considerably over the last five years. This has some concerned that we may be in for another dramatic correction. However, recent statistics suggest home values will not crash as they did a decade ago. Instead, this time they will come in for a soft landing.

The previous housing market was fueled by an artificial demand created by mortgage standards that were far too lenient. When this demand was shut off, a flood of inventory came to market. This included heavily discounted distressed properties (foreclosures and short sales).

Today’s market is totally different. Mortgage standards are tighter than they were prior to the last boom and bust. There is no fear that a rush of foreclosures will come to market. The Mortgage Bankers’ Association just announced that foreclosures are lower today than at any time since 1996.

Case Shiller looks at the percentage of appreciation as compared to the same month the year prior. Here is a graph of their findings over the last ten months:

Image title

As we can see, home price appreciation is softening as more inventory comes to market. This shows that real estate prices are not crashing, but merely returning toward historic appreciation numbers of 3.6% annually.

Bottom Line

Home prices are leveling off. Long term, that is a good thing for the housing market.


Latest Blog Posts

4 Major Reasons Households In Forbearance Wont Lose Their Homes To Foreclosure

There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially

Read More

Why This Is A Great Year To Sell Your Vacation Home

As vaccines are administered and travel resumes, many of us are beginning to plan for those long-awaited vacations we missed out on over the past year. Some households are focusing their efforts on

Read More

Latest Jobs Report What Does It Mean For You The Housing Market

Last Friday, the Bureau of Labor Statistics released a very encouraging jobs report. The economy gained 916,000 jobs in March – well above expert projections of 650,000 to 675,000.

Read More

Why You Should Think About Listing Prices Like An Auctions Reserve Price

For generations, the homebuying process never really changed. The seller would try to estimate the market value of the home and tack on a little extra to give themselves some negotiating room. That

Read More