The Market Is Seeing a Decline in Home Prices

 For two years we have seen a boom in the housing market when it comes to price appreciation. We have finally seen the peak, as the prices are now declining.

Prices will keep declining in the near future but will not drop as far as they did during the recession. From the peak in 2006 all the way through to 2012 there was a 27% decrease in home prices.

“It was different in 2008, 2009 because that drop in prices was because of a push from sellers,” said Jeff Tucker, senior economist at Zillow. “Because of foreclosures and short sales there were a lot of extremely motivated sellers who were willing to take a loss on their homes.”

“I would be surprised to see prices anywhere drop below where they were in 2019,” said Tucker. “There was some overheating in the housing market in 2021 through this spring that pushed prices higher than what the fundamentals would support. Now they are coming down.”

With the soaring mortgage rates along with elevated home prices and slow increases in wages, home buying is not in most potential buyers’ future. According to Goldman Sachs we should see a decline of around 5% to 10% from the peak, Wells Fargo predicts a 5.5% decrease. This means the median home price will fall to $364,000.

“The primary driver behind the housing market correction thus far has been sharply higher mortgage rates,” the Wells Fargo researchers wrote. “If our forecast for Fed rate cuts is realized, mortgage rates are likely to fall slightly just as cooling inflation pressures boost real income growth. A modest improvement in sales activity should then follow, which will reignite home price appreciation heading into 2024.”

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Aldi Opens In Covington Soon

Covington residents can see that construction has already begun on the new Aldi grocery store. It is planned that the store will open this winter. The new store will be located at 123 Holiday Boulevard in Covington.

This will be the second location on the north shore and the sixth location in Louisiana. The stores will be supported by a regional distribution center that opened in July in Loxley, Alabama.

Aldi is a German discount chain of grocery stores that are in the United States. The store began in Essen, Germany in 1961. The U.S. headquarters are in Illinois and there are 2,100 stores in 38 states. Most of the products sold at the store are private label which allows the prices to stay low.

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A Decline in Home Prices

September 2022 saw a dip in home values after a two-month 0.4% decline. Those in the industry say that the dip comes from a reaction to the drop in mortgage rates this summer. The future will also see a decline in the housing market due to the rise in mortgage rates since the summer.

The United States has seen declines as follows: Phoenix (-2.3%), Las Vegas (-1.9%), New Orleans (-1.0%), Riverside (-0.9%), and Austin (-0.9%). There has been a rise in prices in the following: Richmond (0.6%), Miami (0.6%), and Indianapolis (0.6%) markets. The greatest year-over-year was in Miami (25.7%), Orlando (23.4%), Tampa (23.2%) and Jacksonville (22.6%).

Fortunately, active listings have risen 3% from this time last year but they are still well below norms before the pandemic. This still is good for buyers as it means there are more options.

Even though there are fewer sales, pending listings dropped 29% compared to September 2021. This is due mostly to the rise in interest rates. Offers to accepted offers also went from 11 days in September 2021 to 19 days in September 2022. Many sellers began to cut the price of their homes to create a since of urgency.

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Questions For Your Real Estate Agent at an Open House

 Looking for a new home can be exciting and fun, but it is nice to have a real estate agent who can help you along the way. One of the most exciting parts is visiting open houses. Your real estate agent can be a big asset when it comes to open houses.

An agent knows the right questions to ask during an open house and can help stay informed. You can see the house and see where you stand as a potential buyer. They can also help you weigh the pros and cons of the open house.

When you walk into a home and everything looks great, you still need to do your due diligence. Ask about any testing that has been done or any potential issues that the home has or might have. If the home was built before 1978, an agent will know what to look for including mold, asbestos, radon, lead paint and soil. Other questions you might find helpful are what’s the flood zoning, how old is the roof, furnace and major appliances, what are the average utility costs, and have there been any major renovations to the home? An agent can help you decide if it is worth putting in an offer on a home depending on the answers to the above questions.

A home might have great curb appeal and be your dream home inside, but if it is in a bad area, that is not good. A listing agent may not have specifics on an area but they can direct you to websites that have the answers. Agents can tell you about nearby parks, restaurants, and shopping.

Remember choosing a real estate agent is one of the most important steps. An agent can help you with the important questions to ask when at an open house.

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