U.S. Home Prices: Will They Keep Rising?
Jul 07, 2024
You've probably heard this one before:
"What goes up must come down." - Sir Isaac Newton ๐ฌ
I bet you've thought about it in a variety of areas of life.
Many people consider this idea when they think about the housing market.
It's one of the most common objections people use when they say they'll wait on the housing market to come back down before making a move.
But is that proper thinking? ๐ค
Home Prices Rising Nearly Everywhere
The Case-Shiller Home Price Index has long been the gold standard for measuring price changes in the housing market.
It's published each month and tells us how real estate prices are changing nationally. Also, it dives a little deeper and measures the top 20 metro markets. ๐
As you can see in the graphic above, all of the top metros in America experienced a price increase from April 2023 to April 2024.
Portland was the slowest grower at 1.7% while San Diego was up a whopping 10.3%.
Interestingly, the national average was 6.3%. That is nearly 2% higher than the long-term average of 4.5% growth a year.
In fact, NAR had this incredible statistic from their first quarter analysis:
"Single-family existing-home sales prices rose in 93% of measured metro areas – 205 of 221 – in the first quarter, up from 86% in the prior quarter."
๐คฏ.
Finding Opportunity
The truth is Sir Isaac Newton was talking about physics when he made his famous quote - not financial markets. ๐ก
Talking about this makes me feel like Ricky Bobby's dad when he explains that there are plenty of other spots you can finish other than first.
Putting aside the shortage of housing across America, one look at a long-term chart of our economy, stock market, housing market, etc. and you'll see a line up and to the right. ๐
As long as we have a printing press for the dollar, it's a safe bet that the rise will continue.
This doesn't mean prices can't come down.
But if they do, they'll likley be much higher than they were when you originally decided to wait.
For example, if prices fell 25% tomorrow (the same amount they dropped in 2008), we'd be back to the start of 2021.
That's it. ๐ซฃ
They'd have to drop by 33% just to get to pre-pandemic prices (Dec 2019).
While many doom-and-gloomers might be rooting for that outcome, it would be the largest housing crash in America's history.
I can pretty much guarantee that if that happened and you waited until then to buy, you will have either lost your job or the banks will have stopped lending - cutting off your ability to purchase. ๐ฒ
Given the Fed printed enough money in a weekend to hold off 3 of the 4 largest bank failures in our history recently, I'm betting prices are much more likely to rise than fall.
After all, the system depends on it.
Dr. Alex Stewart
Founder
Are you a real estate agent and looking to grow your business using information like this?
Here's 3 ways to dive deeper:
- ๐ฏ Market Insiders Coaching Membership: Join an exclusive group of Realtors focused on becoming experts in our local Jacksonville market. This membership gives you access to monthly live coaching from yours truly, a member-only community for private updates and discussions, and additional resources to address clients questions and supercharge your business.
Rated 9.65 out of 10 for value to their business by my members. - ๐ฉ๐ป Digital Course: How to Use Market Stats in Your Business: Accelerate your business growth by learning how to use data. This course will help you more easily understand the market, improve your client presentations, and increase your conversion rate with clients. No finance degree required as I lay everything out in very simple terms.
Rated 9.84 out of 10 for value to their business by 100+ Realtors. - ๐ Schedule a live presentation: Want to learn in person? I offer the MarketPulse 360 presentation that connects all the dots (national to local) so you get a comprehensive breakdown of today's market. It's 2 hours of beautiful charts designed to give you all the major trends you need to know about and address the most common questions in the market. You'll walk out feeling more confident, with resources to use in your business, and a level above the rest of the Realtors who are wandering around blindly.
Rated 9.74 out of 10 for value to their business by 600+ Realtors.
