Home Prices Are Falling In More & More Markets Now | Nick Gerli
Jun 30, 2024
auto_awesome
Real estate expert Nick Gerli discusses the bifurcated housing market with record highs and falling prices in multiple markets. He highlights the importance of understanding mean vs. median prices and predicts the future of home prices amidst increasing inventory and market divergences.
Understanding the difference between mean and median is crucial to grasp the true housing market picture.
US home prices are at record highs on average, but many red-hot markets are experiencing double-digit price declines.
The common belief linking mortgage rate decreases to higher home prices is challenged by current market dynamics.
Deep dives
The Real Estate Market in Austin and Florida
Home prices in Austin have declined by almost 20% over the last two years, yet buyer demand hasn't shown a significant increase, leading to a continuous rise in inventory. Similarly, in Florida, prices are beginning to drop across various markets without a notable surge in buyer demand.
Understanding the Housing Market Bubble
Housing analyst Nick Jerle highlights the record high bubble in the housing market, emphasizing that US home prices are 30 to 35% overvalued compared to long-term norms. Several cities, labeled as red hot markets until recently, are now witnessing double-digit percentage price declines.
Impacts of Mortgage Rates on Housing Prices
Despite a surge in mortgage rates over the past two years, housing prices have continued to rise. The common narrative linking mortgage rate decreases to higher home prices is challenged by the current market dynamics.
Inventory Surges and Home Affordability
A significant increase in housing inventory across various states, notably in Texas and Florida, signals potential market corrections. Factors such as rising insurance rates, property taxes, and maintenance costs have contributed to a shift in housing affordability, impacting pricing strategies for sellers and buying decisions for prospective homeowners.
Navigating the Housing Market Cycle
Amidst a fluctuating housing market landscape, buyers in overvalued markets are advised to exercise caution and patience, anticipating price corrections. Sellers are encouraged to set realistic pricing based on market trends, while renters may benefit from declining rents in select regions within the Sun Belt states.
I find myself frequently repeating the advice that in today's highly bifurcated economy, it's critical to understand the difference between the mean and the median in order to get a true picture of what's going on.
And the housing market is no different.
On the mean, or average, level, US home prices are at a record high.
But in a growing number of markets, a number of them red-hot until recently, prices are down by double-digit percentages. And inventory is spiking.
To make sense of the growing divergences and find out where prices are most likely headed from here, we're fortunate to welcome back to the program housing analyst Nick Gerli, founder of reventure Consulting and creator of the new reventure app.
WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com
#housingmarket #homeprices #housingcrash
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode