Whether you are at a party, family get-together, work, or just talking to a neighbor, there is a good chance you will hear people talking about how crazy the real estate market’s been. And you will probably hear people’s opinions on whether it is a good time to buy or sell a house.
But what are they basing their opinion on?
Sometimes it is just based on what the have heard second (or third) hand from a friend or family member. But a lot of times it is “backed up” by what they have read or heard in the news, which is often just from a headline like, “Home Price Growth Is Finally Decelerating—and It’s Just the Start”, which Fortune recently published.
Someone who only read that headline could easily take that as a sign that prices are not going to go up as much in 2022, and that is just the start! So, it is an easy leap to think that must mean prices may even go down next year. That could easily cause a homeowner to sell in a hurry before prices drop. Or, it could cause a buyer to wait for prices to come down and miss out on a house that would have been perfect for them, only to find nothing changed, or (worse!) prices went up even higher.
If you actually read the Fortune article, it doesn’t entirely prove out the headline, or at least how most people would interpret it. In fact, the “deceleration” they refer to in the headline is a 0.3% dip in home prices between September 2020 and September 2021. It went from an all-time high of 19.8% year-over-year gain, down to a 19.5% gain. Okay, to be fair, that is a “start” as they said in the headline…but how much more deceleration should we expect if that is just the beginning?!
Well, the predictions they cite in the article are all over the place for the next year:
Zillow predicts prices will rise 13.6%
Goldman Sachs predicts a rise of 13.5%
Fannie Mae expects a 7.9% increase
Freddie Mac thinks it will be a 7% bump up
Redfin is predicting price growth will only be 3%
CoreLogic sees it slowing to 1.9%
And the Mortgage Bankers Association is the only one cited with any amount of a decrease at 2.5%
To sum it up, according to the sources they cite, sure there may very well be a deceleration in prices, but that doesn’t mean prices will fall. Other than one source, they all predict that prices will continue to go up. More than half of them anticipate the growth rate to be higher than average…
…not quite what you may have thought if you just read the headline alone.
That is just one example of a headline that could be misleading and cause you to judge whether it is a good time for you to buy or sell a house. Much of what you see, hear, or read about the market tends to be too broad to make an informed decision, and the headlines can often be misleading. If you want a true read on the market and advice on whether it makes sense for you to buy or sell, your best bet is to speak to an agent who knows the local market.