Keeping Current Matters had a good article discussing the importance of correctly pricing your home when you first put it on the market. Here are some highlights from the article:

While it’s a hot seller’s market this spring, overpricing your home can backfire. The asking price creates a critical first impression – if too high, it deters buyers before they even tour the home. As U.S. News states, “Buyers aren’t going to pay attention to an inflated asking price,” even in a hot market.

Overpricing risks your listing getting skipped entirely or not receiving offers if deemed too expensive. It may then require a price reduction down the line, which can raise doubts for some buyers.

The smarter approach is pricing at or slightly under current market value from the start. But determining that ideal price requires an agent’s expertise in evaluating condition, upgrades, comps, and other factors to pinpoint an accurate value.

Properly priced homes attract more buyers, better odds of a bidding war, and tend to sell quicker. So, while maximizing profits is the goal, overpricing does more harm by deterring buyers and stalling the sale.

Pricing your home right is key for a successful sale. Work with an experienced local agent like me to set the perfect asking price based on comparable sales. If you’re thinking of selling, let’s meet for a free pricing consultation and market analysis. Even if you’re not ready yet, I’ll provide home prep tips to get you started.

Don’t leave money on the table – contact me today to ensure your home sells for top dollar.

If you’d like to read the full article, you may find it HERE.

Maintaining a positive mindset in the face of daily challenges is crucial for me, and that’s why I steer clear of the news when it comes to the state of the world, my business, and myself. Perhaps that is why I am surprised the question about the possibility of another housing crash seems to linger. Let’s break down why the current market conditions differ significantly from those in 2008, and why we shouldn’t fear another housing crash.

Firstly, obtaining a home mortgage loan has become significantly more challenging today than it was in 2008. This means that individuals in precarious financial situations, who are more likely to struggle with house payments and face foreclosure, are not as easily able to secure a loan.

Secondly, the housing supply is much lower now than it was in 2008, with today’s market having less than one-third of the inventory of 2008. In contrast, the oversaturation of the market with too many houses, especially from short sales and foreclosures, was a primary factor that led to falling prices in 2008.

Lastly, a critical distinction lies in how people are managing their home equity. Unlike in 2008, where individuals were freely tapping into their home equity, the current scenario sees home equity at an all-time high. This financial stability provides homeowners with alternatives to foreclosure during times of financial hardship.

Below is an article from Keeping Current Matters (you can read the original article here) that goes into a little further detail on these three points.

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Why We Aren’t Headed for a Housing Crash

If you’re holding out hope that the housing market is going to crash and bring home prices back down, here’s a look at what the data shows. And spoiler alert: that’s not in the cards. Instead, experts say home prices are going to keep going up.

Today’s market is very different than it was before the housing crash in 2008. Here’s why.

It’s Harder To Get a Loan Now – and That’s Actually a Good Thing

It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one.

Things are different today. Homebuyers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is:

The peak in the graph shows that, back then, lending standards weren’t as strict as they are now. That means lending institutions took on much greater risk in both the person and the mortgage products offered around the crash. That led to mass defaults and a flood of foreclosures coming onto the market.

There Are Far Fewer Homes for Sale Today, so Prices Won’t Crash

Because there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), that caused home prices to fall dramatically. But today, there’s an inventory shortage – not a surplus.

The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now (shown in blue) compares to the crash (shown in red):

Today, unsold inventory sits at just a 3.0-months’ supply. That’s compared to the peak of 10.4 month’s supply back in 2008. That means there’s nowhere near enough inventory on the market for home prices to come crashing down like they did back then.

People Are Not Using Their Homes as ATMs Like They Did in the Early 2000s

Back in the lead up to the housing crash, many homeowners were borrowing against the equity in their homes to finance new cars, boats, and vacations. So, when prices started to fall, as inventory rose too high, many of those homeowners found themselves underwater.

But today, homeowners are a lot more cautious. Even though prices have skyrocketed in the past few years, homeowners aren’t tapping into their equity the way they did back then.

Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has actually reached an all-time high:

That means, as a whole, homeowners have more equity available than ever before. And that’s great. Homeowners are in a much stronger position today than in the early 2000s. That same report from Black Knight goes on to explain:

“Only 1.1% of mortgage holders (582K) ended the year underwater, down from 1.5% (807K) at this time last year.”

And since homeowners are on more solid footing today, they’ll have options to avoid foreclosure. That limits the number of distressed properties coming onto the market. And without a flood of inventory, prices won’t come tumbling down.

Bottom Line

While you may be hoping for something that brings prices down, that’s not what the data tells us is going to happen. The most current research clearly shows that today’s market is nothing like it was last time.

Article taken from Realtor Magazine.

Article by Keeping Current Matters.

Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):

And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in your local area, connect with a real estate agent.