Do Home Prices Ever Decline?

The short answer is... yes.

But there is a lot more to it than that. We have to first look at what time frame we are looking at. If you ask me "have prices increased since 2008", the answer is YES they have. If you ask me "have prices increased or declined since 2020", that answer is YES they have declined. And there are some exceptions of course... but the general rule of thumb of the reality is that median home prices have declined.

The reason is that real estate price trends are cyclical, however, given a long enough time span of 15+ years (or even 30-50 years) the median price of a home has increased, including keeping up with inflation, supply/demand and many economic factors.

We just had our home's taxes reduced, saving $1500 a year!! But with that tax reduction comes the uncomfortable reality that our home's value also declined, by neary 40% since 2021!!

That's a massive decline, but we still have equity, because we bought the home a decade before.

This is why when thinking of selling or buying a home getting a real estate appraisal is critical. An appraiser does not have any interest in the property and does not advocate for a value or even a direction in value. So when you get an appraisal it is the most accurate snap shot of the current market value without any pressure for a given value. This lets you form a better strategy when negotiating the buying or selling of a home. You may still sell for higher (or lower) than an appraiser as real estate can also be a subjective and emotional transaction that an appraisal's data driven objective value conclusion cannot predict. So, YES, prices (or rather Values), do go down during certain economic times. Owning a home through the bad economic times can find you sitting on equity down the line. If you want to know what your home's value is, contact me at gheredia@valueright.com