FNMA predicts price declines in the housing market nationwide for the next two years. In the first quarter of 2023 they predict year over year appreciation at 3.3%, but all this appreciation has already occurred in 2022. Home prices have been dropping nationwide and the stats won’t show year over year declines until the 2nd quarter.
Starting in the 2nd quarter of 2023 FNMA predicts declines of 1.3%, followed by declines of 1.4% and 1.5% in the 3rd and 4th quarters. Going into 2024 they are predicting declines of 1.4% in the 1st quarter, 1.5% in the 2nd quarter, and declines of 1.4% in the 3rd and 4th quarters.
Have Home Values Peaked?
If FNMA is correct, what does all this tell us? Home prices have already peaked, and interest rates and the economy are influencing home prices. They are not predicting major price swings, so buyers can rest assured if they find a home, they love at an interest rate they can afford, they should buy.
For sellers, it is a slightly different story. Your home probably already peaked in value back in May. We study the local median and average home prices, and they are split as to when home prices peaked. One says May, the other says June. Since then, we have watched home prices fall locally and nationwide.
As Realtors we do not advocate for prices to rise or fall. The market is what it is, and a trusted Realtor should properly interpret the market and the data and explain what is going on. A good Realtor is your economist of choice if they study the numbers. Over the years the Ellis Team has been able to get our listed sellers out in a declining market because we know how to market a home in a shifting market.
Experience Counts
85% of Realtors today have never worked in a shifted market. They only know one thing, and it’s up. How you price, market, and find buyers changes in a shifting market.
Our Current Market Index stands as high today as it has all year. While the numbers are not alarming, it is not a good sign as our index accurately predicts the market going forward. We have also noticed the differential between active listings and total pending listings is as high as it’s been all year. Another sign that the market has cooled.
The 2021 market is not coming back. We are back to a normalized market subject to market conditions and changing economic numbers. Builders are reducing prices and offering incentives. It is not a horrible time to sell. It might seem horrible compared to previous years. Sellers no longer have the upper hand. The good news for sellers is, neither do buyers. We have a more balanced market than we have seen in years, and that’s not a bad thing.
It Pays to Know the Data
If you’re playing a sport or a board game, it pays to know the rules. If you are buying or selling in the real estate market, it pays to study the data. Knowing what is going on in the street is invaluable. Always ask a Realtor to prove to you what the market is doing. So many Realtors give advice based upon how their personal month is going. A Realtor can have one good month and think the market is great followed by a horrible month the next. This doesn’t mean the market changed drastically, simply that their sales did.
Too many Realtors judge the market by how they are feeling in the market and how their sales are going. True professionals study the market and can explain to you what you need to know to make the best decision. A Realtor’s value is never greater than in a shifting market. Choosing the wrong Realtor can cost you thousands, even when you think you are saving.
Good luck, and Happy Selling! If you are thinking of selling, call Brett Ellis or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com
December SW Florida Real Estate Market Update
Toys for Tots
The Ellis Team is a drop-off location for Toys for Tots. Please help us provide a Happy Holiday Season by dropping off toys to our office by December 15th.
