3 Reasons Why Prices Won’t Fall Any Time Soon

Here are three reasons why home prices won’t drop the way you think.

Will home prices finally go down? We’re constantly getting that question. People are waiting to buy until prices drop, but will that happen? You might think it’s likely with all the news about inflation and interest rates, but what’s really happening in the market?

Take it from a real estate expert: Prices probably won’t drop the way you’re expecting. We may see a correction, but we won’t see anything like what happened to prices in 2008. Here are a few good reasons why:

1. Our inventory is still tight. We still have fewer than two months of inventory. We won’t see prices drop significantly until we’re in a buyer’s market, which happens when we have six months of inventory. Our supply of homes would have to triple for that to happen.

"Prices probably won’t drop the way you’re expecting."

2. The experts expect price appreciation. If you average all the major real estate organizations' home price expectations, it equates to 20% over the next three years. Today’s $500,000 home will be worth $600,000 in just three years.

3. Interest rates aren’t forever. We want to find your forever home, not your forever rate. Interest rates are climbing, so instead of waiting, lock one in right now. If it goes down, you can always refinance.

If you have any questions about our market or real estate in general, feel free to call or email my team or me. We’d love to help you.


#1 By Gordon Cuffe at 2/23/2023 3:32 PM

You were way off on that prediction. Home values plummeted from July to December of 2022 mainly due to rising interest rates and a sharp increase in in homes for sale on mls.

#2 By Johnny at 2/23/2023 5:05 PM

Gordon, thank you for taking the time to leave a comment. Not sure what you mean by way off.

In 2022 inventory never went above a 3-month supply in the Sacramento region as a whole. Ask any buyer home searching and they will tell you inventory is tight.

Interest rates have already started to come down and barring an unforeseen catastrophe they are projected to continue to fall.

Prices did go down during the brief 6-month time you mentioned, but the YOY trend showed a median home value increase of 7%.

Also, I referenced what home values were projected to do in the NEXT 3 years. Would be fun to revisit this then.

This post was intended for people wanting to wait to buy because they believed a crash similar to 2008 was coming. That crash did not happen and there are no indications one is coming.

Hope that helps.

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