A Real Estate Professional Helps You Separate Fact from Fiction | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
A Real Estate Professional Helps You Separate Fact from Fiction | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
If youāre following the news, chances are youāve seen or heard some headlines about the housing market that donāt give the full picture. The real estate market is shifting, and when that happens, it can be hard to separate fact from fiction. Thatās where a trusted real estate professional comes in. They can help debunk the headlines so you can really understand todayās market and what it means for you.
Here are three common housing market myths you might be hearing, along with the expert analysis that provides better context.
Myth 1: Home Prices Are Going To Fall
One piece of fiction many buyers may have seen or heard is thatĀ home pricesĀ are going to crash. Thatās because headlines often use similar, but different,Ā termsĀ to describe whatās happening with prices. A few you might be seeing right now include:
- Appreciation, or an increase in home prices.
- Depreciation, or a decrease in home prices.
- And deceleration, which is an increase in home prices, but at a slower pace.
The fact is,Ā expertsĀ arenāt calling for a decrease in prices. Instead, they forecastĀ appreciation will continue, just at a decelerated pace. That means home prices will continue rising and wonāt fall. Selma Hepp, Deputy Chief Economist atĀ CoreLogic,Ā explains:
ā. . . higher mortgage rates coupled with more inventory will lead to slower home price growthĀ but unlikely declines in home prices.ā
Myth 2: The Housing Market Is in a Correction
Another common myth is that the housing market is in a correction. Again, thatās not the case. Hereās why. According toĀ Forbes:
āA correction is a sustained decline in the value of a market index or the price of an individual asset.Ā A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.ā
As mentioned above, home prices are still appreciating, and experts project that will continue, just at a slower pace. That means the housing marketĀ isnāt in a correctionĀ because prices arenāt falling. Itās just moderating compared to the last two years, which were record-breaking in nearly every way.
Myth 3: The Housing Market Is Going To Crash
Some headlines are generating worry that the housing market is a bubble ready to burst.Ā But experts say today isĀ nothing like 2008.Ā One of the reasons why is because lending standards are very different today. Logan Mohtashami, Lead Analyst forĀ HousingWire,Ā explains:
āAs recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter. This typically happens in a recession, however,Ā the notion that credit lending in America will collapse as it did from 2005 to 2008 couldnāt be more incorrect, as we havenāt had a credit boom in the period between 2008-2022.ā
During the lastĀ housing bubble, it was much easier to get a mortgage than it is today. Since then,Ā lending standardsĀ have tightened significantly, and purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash.
Bottom Line
No matter what youāre hearing about the housing market, letās connect. That way, youāll have a knowledgeable authority on your side that knows the ins and outs of the market, including current trends, historical context, and so much more.
Call Christophe Choo at (310) 777-6342 to tour your future home "HERE"Ā
or click "HERE"to estimate your home value