Understanding the trends in home sale prices can be confusing. The National Association of Realtors (NAR) released their report on Existing Home Sales (EHS) this August 2023. It showed that the average sale price of homes have been decreasing. It changed the average standard, which are now, homes that are low-cost and modest in value than past medians.
There are reports that home sale prices have fallen but have been gradually bouncing back up. One says that prices have been decreasing, while the other says it’s already recovering. Which of these is true?
Both are true. However, they make use of different methods in measuring. Meaning, they represent two different things.
Median is the average of a scale. It represents the normal standard. Anything above or below it are deviants, beyond average. NAR reports that the majority of people are opting to buy homes that are budget friendly. It represents what most of the market is usually going after, these days. Overall, setting the new average standard – the median that aligns to what majority of the buyers seek. Due to being the most demanded on average, a “greater number of homes” that are within a lower price bracket are purchased.
On the other hand, there are reports that home sale prices are rising. Their approach in measuring is based on the repeat-sales method. It is explained by Gordon as the “calculation of price change of a specific real estate over a different time frame” (The Business Professor, 2023).
This method has an implication that there is a particular set of home characteristics their data was based on. Measurement was made on homes that had similar characteristics for consistency on valuation. This approach may not properly account for prices of properties that have different attributes. Having other features can tweak home values. Does that set of home characteristics necessarily agree with what you’re looking for? If so, it can be reasonable for you to base reference in their reports when deciding. Whether that is for you to explore more options or to finally make an offer, you know now more about home sales prices, before you get into anything serious.
It is vital to remember that properties are long term assets that appreciate and depreciate over time, depending on different conditions. That is why, maintaining and making improvements to a home can help improve its value. There are also seasonal trends in real estate that can affect the valuation of a property on the market.
This is where agents come in. They can help you out in navigating the process of buying or selling, and maximize the benefits for you. They have a deep understanding of the industry, clarify any confusion and advise you for available alternatives you can check out. Looking into doing just that? Connect with us!
References
EHS Report: https://rb.gy/nazp8
Keeping Current Matters Blog: https://rb.gy/2qw7w
Business Professor: https://rb.gy/6f0ce
