Welcome to the AllIdahoFallsRealEstate.com Blog

2018-09-27 15:13:43
Are Home Prices Softening or Are They Falling?

We are beginning to see reports that more housing inventory is coming to the market and that buyer demand may not be increasing at the same pace it did earlier this year. The result will be many headlines written to address the impact that these two situations will have on home values.

Many of these headline writers will confuse “softening home prices” with “falling home prices,” but there is a major difference between the two.

The data will begin to show that home values are not appreciating at the same levels as they had over the last several years (softening prices). This does NOT mean that prices are depreciating (falling prices).

Here is an example: Over the last several years, national home values increased by more than 6% annually. If you had a home worth $300,000 at the beginning of the year, it would be worth $318,000 by year’s end. If the appreciation rate “falls” to 4%, that $300,000 house would be worth $312,000 at the end of next year – a $6,000 difference.

The price of the home did not fall. It just didn’t increase at the level it had the previous year.

Appreciation rates are projected to end this year at approximately 5%, and then to somewhere between 4-5% next year. This in appreciation rate will cause home price increases to soften.

Again, this does not mean that home prices will depreciate, but instead that they will appreciate more slowly.

Bottom Line

Be careful when reading headlines that discuss home values. Some headline writers will be legitimately confused and will use the word falling in place of softening. Others will realize that the headline “Home Prices are Falling!” will get more clicks than “Home Prices are Softening” and will intentionally write the more compelling headline. Read the article. If the word depreciation is not mentioned, home values are not falling.

 
Blog Archive
2019-02-21 11:58:34
How To List Your Home for the Best Price

2019-02-19 14:53:39
Greater Idaho Falls Association of Realtors MARCH BLOOD DRIVE

2019-02-18 13:26:32
Millionaire To Millennials: Don’t Get Stuck Renting A Home… Buy One!

2019-02-15 10:18:25
Why Homeownership Matters Now More Than Ever

2019-02-14 11:16:28
Pre- Foreclosures on Zillow

2019-02-12 11:59:42
Thinking of Selling Your House in Idaho Falls? This is a Perfect Time!

2019-02-08 09:24:20
The Cindy Bates Group is Here for You!

2019-02-07 14:59:23
Why you Shouldn't FSBO

2019-02-06 11:38:31
Why It Makes No Sense to Wait for Spring to Sell

2019-02-05 10:54:50
Whose Mortgage Do You Want to Pay? Yours or Your Landlord’s?

2019-02-01 10:27:08
5 Reasons Idaho Falls Homeowners Throw the Best Super Bowl Parties!

2019-02-01 09:33:07
Idaho Falls, Do You Know How Much Your Home Has Increased in Value?

2019-01-30 10:53:44
Is Student Loan Debt A Threat to Homeownership? No!

2019-01-29 09:18:14
Tuesday Tid Bit! It's not too late! Jan 31, Feb 1

2019-01-28 16:19:37
Think You Should For Sale By Owner? Think Again!

2019-01-24 09:24:16
3 Things You Need in a Shifting Real Estate Market

2019-01-23 10:45:23
Do You Prefer the Charm of an Existing Home?

2019-01-22 09:47:32
Buying a Home Young is the Key to Building Wealth

2019-01-21 20:21:40
The Difference Having a Professional on Your Side Makes

2019-01-18 09:24:53
What is the Cost of Waiting Until Next Year to Buy?

2019-01-17 11:31:14
Where is the Housing Market Headed in 2019?

2019-01-16 15:21:10
Is the Recent Dip in Interest Rates Here to Stay?

2019-01-15 15:04:55
Tax Time is Upon Us

2019-01-14 22:31:46
Buying a House This Year? This Should Be Your 1st Step!

2019-01-11 12:36:18
Homeownership Remains a Huge Part of the American Dream

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.