Prices Rising: Is Real Estate About to Take Off Again?
Sep 08, 2024
The latest update on the Case Shiller Home Price Index is out and it helps us see how home prices are changing in various parts of the country.
Nationally, prices are up 5.4% compared to the same time last year. π
I doubt many people would have expected prices to continue to rise with rates still between 6-7%, but that's exactly what's happening.
In fact, if we take a look at the top 200 markets in the U.S., only 21 have lower prices than a year ago according to Zillow:
Only 11 have a decline of 1% or more. π€―
It is worth noting that FL is boasting 4 of the 11:
- Naples: -1.1%
- Crestview: -2.2%
- North Port: -3.6%
- Cape Coral: -4.5%
Florida and Texas are coming back down to earth a bit after leading the country in price growth for the past few years. π¬
Finding Opportunity
Typically, you're going to look at this information one of two ways:
- π₯³ This is awesome news because you own a home and that means your wealth is increasing.
- π₯΅ This is a nightmare because the dream of homeownership is feeling more like a dream than a possibility.
If you're in the second camp, here's the thing: it is what it is. π€·βοΈ
As I tell my students at UNF, we have to eliminate our victim mentality and focus on creating the reality we want.
In other words, we need to adopt a growth mindset. π§
If you decide you want to do something, you can put your mind to it and accomplish the goal. You control your future. πͺ
That doesn't mean it will be easy, but it is possible.
This applies to becoming a homeowner, too. π‘
When should you decide on getting serious about buying a home?
As soon as possible. π²
Let's consider for a moment what might happen to home prices if rates continue to fall. π€
If prices are up 5% as rates are elevated compared to recent years, what do you think will happen if rates come down 1%?
I don't think it's a reach to assume prices would increase by 10%/year.
Also, consider that a $15,000 increase in price on a $350k house wipes out the benefit of a 0.25% rate drop on an FHA loan.
Waiting for lower rates doesn't always mean a cheaper payment if prices rise at the same time. π‘
Decide on your goals, create a plan, and make it happen. π
Dr. Alex Stewart
Founder
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