AgentOwned Charleston Real Estate Trend Alert - Home Prices Still Growing

Navigating the current landscape of home prices might feel a bit perplexing, especially with conflicting information circulating. Some insist that prices are on the decline, despite compelling data proving otherwise. This misunderstanding can be attributed to unreliable sources and, in some cases, media coverage distorting the actual trends reflected in the data.

To simplify matters, let's delve into the essential information backed by trustworthy real data.

Understanding Normal Home Price Seasonality In the real estate market, there are expected patterns known as seasonality, characterized by predictable fluctuations throughout the year. Spring typically marks the pinnacle of homebuying activity, remaining robust through the summer but tapering off as the cooler months approach.

Home prices align with seasonality because appreciation is most pronounced when demand is high. This consistency establishes a reliable long-term trend in home prices. Utilizing data from Case-Shiller, the graph below illustrates the typical percentage change in monthly home prices from 1973 through 2022 (without adjustments for seasonality):

As evident in the data, home prices exhibit growth at the beginning of the year, albeit not as pronounced as during the spring and summer. The market's decreased activity in January and February, owing to fewer relocations in colder months, results in a slower price increase. As the market transitions into the peak homebuying season in spring, activity intensifies, leading to a more substantial uptick in home prices. Subsequently, as fall and winter approach, prices continue to grow, albeit at a more measured pace as activity decreases.

This Year's Alignment with Seasonality Now, let's compare this year's data with the long-term trend (see graph below):

The dark bars signify the enduring trend, while the green bars represent this year's developments. The alignment of the green bars with the long-standing market norms indicates a positive shift. This suggests a more sustainable pace of price growth compared to the rapid increases witnessed in recent years.

In summary, the national trend indicates that prices aren't plummeting; rather, there's a normalization of price growth. It's crucial to remain vigilant, as there's a possibility that media outlets might misinterpret this deceleration in home price growth as an outright decline. In such instances, it's advisable not to rely solely on headlines; seek guidance from a reputable real estate professional who can provide the necessary context.

Remember, witnessing a slowdown in home price growth as the year progresses is normal, and it does not imply a decline. Instead, prices are ascending at a more moderate and sustainable pace.

The Bottom Line Home price appreciation is reverting to the expected patterns of normal seasonality, signaling a positive development. For inquiries about local price trends, feel free to connect with us, your trusted AgentOwned Realty, the foremost local real estate experts in South Carolina.

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