If you need assistance, please call 239-777-2864

Home Price Deceleration Doesn’t Mean Home Price Depreciation

Friday, June 24, 2022   /   by Julie Morgan

Home Price Deceleration Doesn’t Mean Home Price Depreciation

Home Price Deceleration Doesn’t Mean Home Price Depreciation | MyKCM


Home Price Deceleration Doesn’t Mean Home Price Depreciation

Experts in the real estate industry use a number of terms when they talk about what's happening with home prices. And some of those words sound a bit similar but mean very different things. To help clarify what's happening with home prices and where experts say they're going, here’s a look at a few terms you may hear:

  • Appreciation is when home prices increase.
  • Depreciation is when home prices decrease.
  • Deceleration is when home prices continue to appreciate, but at a slower pace.

Where Home Prices Have Been in Recent Years

For starters, you’ve probably heard home prices have skyrocketed over the past two years, but homes were actually appreciating long before that. You might be surprised to learn that home prices have climbed for 122 consecutive months (see graph below):

Home Price Deceleration Doesn’t Mean Home Price Depreciation | MyKCM

As the graph shows, houses have gained value consistently over the past 10 consecutive years. But since 2020, the increase has been more dramatic as home price growth accelerated.

So why did home prices climb so much? It’s because there were more buyers than there were homes for sale. That imbalance put upward pressure on home prices because demand was high and supply was low.

Where Experts Say Home Prices Are Going

While this is helpful context, if you’re a buyer or seller in today’s market, you probably want to know what’s going to happen with home prices moving forward. Will they continue that same growth path or will home prices fall?

Experts are forecasting ongoing appreciation, just at a decelerated pace. In other words, prices will keep climbing, just not as fast as they have been. The graph below shows home price forecasts from seven industry leaders. None are calling for prices to fall (see graph below):

Home Price Deceleration Doesn’t Mean Home Price Depreciation | MyKCM

Mark Fleming, Chief Economist at First American, identifies a key reason why home prices won’t depreciate or drop:

In today’s housing market, demand for homes continues to outpace supply, which is keeping the pressure on house prices, so don’t expect house prices to decline.”

And although housing supply is starting to tick up, it’s not enough to make home prices decline because there’s still a gap between the number of homes available for sale and the volume of buyers looking to make a purchase.

Terry Loebs, Founder of the research firm Pulsenomics, notes that most real estate experts and economists anticipate home prices will continue rising. As he puts it:

“With home values at record-high levels and a vast majority of experts projecting additional price increases this year and beyond, home prices and expectations remain buoyant.

2018-Both-Logos-Vert.png


  buying

View Southwest Florida Real Estate
Latitude Group
3208 Chiquita Blvd S, Suite 208
Cape Coral, FL 33914
239-777-2864
Premiere Plus Realty Co
Southwest Florida's Largest Independent Broker
of Real Estate Professionals

Naples | Marco Island | Bonita Springs | Estero
| Ft. Myers | Cape Coral | Punta Gorda | Port Charlotte

The source of this real property information is the copyrighted and proprietary database compilation of the Southwest Florida MLS organizations Copyright 2022. Southwest Florida MLS organizations. All rights reserved. The accuracy of this information is not warranted or guaranteed. This information should be independently verified if any person intends to engage in a transaction in reliance upon it. The property information herein is derived from various sources that may include, but not be limited to, county records and the Multiple Listing Service and it may include approximations. Although the information is believed to be accurate, it is not warranted and you should not rely upon it without personal verification.
2022 Royal Palm Coast REALTOR® Association. All rights reserved. Information has not been verified, is not guaranteed, and is subject to change. The data relating to real estate for sale on this web site comes in part from the Internet Data Exchange (IDX) of the Florida Gulf Coast Multiple Listing Service, Inc. Real estate listings held by brokerage firms other than Kevin O'Reilly/David Lawrence - Latitude RE Group IDX logo and detailed information about them includes the name of the listing brokers. The information being provided is for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Last Updated: 6/27/2022 6:15 AM CST
The data relating to real estate for sale on this limited electronic display comes in part from the Southwest Florida Multiple Listing Services. Properties listed with brokerage firms other than Kevin O'Reilly/David Lawrence - Latitude RE Group are marked with the BR Program Icon or the BR House Icon and detailed information about them includes the name of the Listing Brokers. The properties displayed may not be all the properties available through the BR Program. The source of this real property information is the copyrighted and proprietary database compilation of the participating Southwest Florida MLS organizations and is Copyright 2017 Southwest Florida MLS organizations. All rights reserved. The accuracy of this information is not warranted or guaranteed. This information should be independently verified if any person intends to engage in a transaction in reliance upon it. Some properties that appear for sale on this limited electronic display may no longer be available. For the most current information, contact Kevin O'Reilly/David Lawrence - Latitude RE Group Data last updated 6/27/2022 6:15 AM CST.
© 2022 My Florida Regional MLS DBA Stellar MLS, Inc.. All rights reserved. The data relating to real estate displayed on this website comes in part from the Internet Data Exchange (IDX) Program of My Florida Regional MLS DBA Stellar MLS, Inc. All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independently verified. Listing information is provided for consumers' personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law.6/27/2022 6:15 AM CST
The source of this real property information is the copyrighted and proprietary database compilation of the Southwest Florida MLS organizations Copyright 2022. Southwest Florida MLS organizations. All rights reserved. The accuracy of this information is not warranted or guaranteed. This information should be independently verified if any person intends to engage in a transaction in reliance upon it. The property information herein is derived from various sources that may include, but not be limited to, county records and the Multiple Listing Service and it may include approximations. Although the information is believed to be accurate, it is not warranted and you should not rely upon it without personal verification.
This site powered by CINC: www.cincpro.com