I want to buy another home but don't want to give up my low interest rate. If you have heard this from a would-be Seller/Buyer then you need to watch this video.
The media and even Realtor Associations are saying home prices are down. Citing the median home price has come down. While it is true the median home price has come down, that doesn’t necessarily mean home prices have fallen.
Let’s look at the median. It is simply the middle. As an example, 1, 5, 10, 15, 20. The middle or median is 10.
Let’s look at some Utah Housing numbers. According to UtahRealEstate.com, Utah’s largest MLS shows that.
In January and February of 2022, 360 homes sold for over $1,000,000
In January and February of 2023, 265 homes sold for over $1,000,000
In January and February of 2022, 5,989 homes sold
In January and February of 2023, 4,640 homes sold
When sales volume is down 22.5%, the odds are great the median will be lower, but that does not mean home values are down. What the median is really telling us is what price sets are selling.
According to the FHFA (Federal Housing Finance Agency), home prices are up 8.4% YOY (year over year).
And according to Case Shiller, home prices are up 5.8% YOY.
Another thing to remember is that real estate prices are not always in a straight line. Focusing on two winter months being a little off doesn’t mean the sky is falling. The thing we have to remember is that we still have a severe housing shortage. To give you an idea of how tight the inventory is. During the peak of the meltdown, we had about 4,000,000 homes for sale. Today, we have 1,250,000 homes for sale which is a staggering 69% fewer homes. When the market is somewhat balanced, we have about 2,000,000 homes for sale. We still have a lot of building to get to balanced.
Now that is not to say that some areas and price points have not declined. We have to remember that real estate is local in nature. However, overall prices have increased, the demand is high, and the supply is low.
- Kitchen Remodel - Upgrading the kitchen can bring a significant return on investment. New cabinets, countertops, and appliances can greatly improve the look and functionality of the space.
- Bathroom Remodel - Similar to the kitchen, a bathroom remodel can add value to a home. Updating fixtures, tiles, and adding new features, such as a spa bathtub or double sink, can make a big difference.
- Deck or Patio Addition - Adding an outdoor living space, such as a deck or patio, can be a great investment. Homeowners can enjoy the space and it adds to the overall square footage of the home.
- Basement Remodel - Remodeling an unfinished basement into a livable space can add significant value to a home. The options are endless, from adding a second living room, a game room, or a home gym.
- Landscaping - Updating the front and back yard with new plants, trees, and walkways can greatly improve the curb appeal and overall look of a home. A well-manicured lawn and garden can add value and make the home more attractive to potential buyers.
It's important to note that the return on investment may vary based on the housing market, location, and the specific renovation project. It's always a good idea to consult with a real estate professional or contractor to determine the best renovation options for your home.