The short answer: yes. But that doesn’t mean this is bad news for home sellers.

The last three years have been locked into a record-breaking conundrum of limited inventory, low interest rates, high home prices, bidding wars, and sales where buyers were closing on houses sight unseen and with waived inspections.

Now, this drop in home prices may actually mean the market is returning to normal – and that’s a good change for buyers and sellers. A normal market isn’t something either party has seen in a while, so now it’s “evening out.” There is only so much more home prices can appreciate, after all, before hitting the colloquial ceiling.

At first glance, the stats on falling home prices can be deceiving. Home sale prices, year over year, are still rising, but at a slow, decelerating rate. According to NAR, the national median home sale price of $389,500 in August is 7.7 percent higher than in August 2021. Realtor.com reports the national median list price for homes active on the market in September was $427,000, which is a 14 percent increase from September 2021.

Looking closer at NAR data, however, it is the second consecutive month-over-month decline this year, compared to the peak median of $413,800 in June. Another hopeful stat for buyers is the increase in median days for homes on the market in September, which increased significantly by 15 percent year-over-year to 50 days. This usually leads to a drop in the listing price.

But sellers should not be discouraged. The current housing market does not show a year-over-year decline of home prices and small month-to-month decreases are seasonally more unstable, so there is nothing drastic to report.

What Happens Next to Home Prices?

There are so many factors swirling around in the housing market that could contribute to the future of home prices.

If home prices continue to rocket beyond buyers’ budgets, it increases the odds of listing prices dropping. It’s like gravity. But, even if they do, homeowners needn’t worry because they still have equity – an average 70 percent homeowner equity today, which is at a 30-year all-time high. This decreases the chance of short sales, foreclosure and more that were prevalent and necessary in the Great Recession.

With rent prices expected to continue to rise over the next year, this may also open the door to more renters seeking homeownership status. First-time homebuyers like this are hunting for starter homes, which can benefit homeowners motivated to sell and upsize (or downsize).

The Bottom Line for Sellers

Sellers should take advantage of this unique situation in the market this fall by preparing a home to sell, instead of expecting the “sell as-is in one day” scenario that had been the recent trend. Homeowners should focus on:

  • Staging
  • Cleaning up curb appeal
  • Declutter
  • Paint
  • Spend time with a good professional photographer for marketing the home
  • Possibly host an open house

Bottom line for sellers: While home prices are dropping, they’re dropping at a slow pace and sales are still strong. 

If you’re ready to sell, you need to work with a real estate agent who stays ahead of the market changes and will work with you to set realistic expectations on the right price to list the home and the days on market. Paige Bird has been the #1 South Carolina RE/MAX agent for the last eight years. In 2021 she: negotiated the sales price for her clients to get 1.27% more than the area’s MLS; sold 115 homes for a total of $33.9 million; sold 68 of those above sales price, with an average list to sales price of 99.08%; and sold listings ranging from $8500 to $1.495 million.

Contact Paige Bird today so she can sit down with you to get started in the home selling process at (843) 450-4773.