The short answer – no!
The housing market saw several months of significant price increases and year-over-year appreciation rates along with greatly reduced inventory, multiple competing offers, strong escalation clauses and, in many cases, way-above-asking-price offers. This frenzied market frustrated buyers and – believe it or not – sometimes sellers because of the challenges of keeping up and competing.
Now that trend seems to be reversing with inventory slowly increasing and price reductions on existing inventory becoming more prevalent. These two factors combined will lead to decreased average sale prices, but these declines will not reverse our appreciation completely. Instead, they will help bring about a more balanced market characterized by healthy inventory and appreciation.
As nice as it was to see 12% price increases year over year, this type of market is unsustainable in the long term. Historically a healthy market is defined by a 3-5% annual appreciation. The start of the new trend indicates we will continue to see the appreciation in the market but at a lower rate which is more sustainable.
This article from RISMedia
further supports the idea that, nationwide, home prices will continue to appreciate but at a decelerated rate. For that reason, we can be fairly certain that “plummet” is not a word we will associate with home values for the foreseeable future.
Please let me know if you have any questions about the market. And, as always, if you know of someone looking to get into the market please let me know. I would be happy to help them if I can.