The difference between a decelerating market and a depreciating market.
Recently, I found an interesting article and some data that I think home sellers particularly want to pay attention to. It’s about prices decreasing. Now, is your price really decreasing? Has it decreased, or is it decelerating?
Let’s talk a little bit about some key terms that I think you’re going to hear around the real estate market. The first one is appreciation. Everybody wants their home to appreciate, and it’s when the home’s price increases. Depreciation is when your price decreases, but that’s not what’s happening in our market. We’re in what we’re calling a decelerating market. So let’s talk a little bit about the difference in that.
Historic standards have always been that we want our homes to appreciate by 3% to 5%. Recently, however, we had a few years where home values increased by 15% to 30%. So right now, we’re seeing the market level off again, and that’s why we’re calling it a deceleration.
So your home isn’t really decreasing in value. Instead, prices are just adjusting to the crazy appreciation we had the last few years. By the time things settle, your home will still be worth more than it was a few years ago.
Right now, the best thing to do is to get a hold of a real estate agent, have them do a price comparison for you in this particular market, and take a look at what we think your home’s going to do. The people that watch numbers and data think that the depreciation of homes is going to level out around 11%, and that’s still a lot of value in your home.
If you want to discuss your specific situation, please call or email me. I am always willing to help!