As we headed into 2023, there were worries about a possible recession that might crash the housing market. Some even predicted home prices could drop by 10-20%, making potential buyers feel uncertain.
But guess what happened? Home prices actually went up more than usual! Brian D. Luke from S&P Dow Jones Indices said that 2023 saw higher-than-average annual home price gains over the past 35 years.
The graph below shows how home prices have changed each year since 1980. The dotted line represents the average increase over time. The main idea? Home prices almost always go up. Forbes also pointed out that the U.S. real estate market has a history of growing in value.
Since 1980, the only time home prices dropped was during the big housing market crash in 2008, and that was temporary. But things are different now. There aren’t enough homes available to meet demand, and homeowners have a lot of equity, making them more financially stable.
Seeing that home values have risen almost every year except during the crash in 2008, it's clear that owning a home can be a smart move. As your home's value goes up, so does your net worth.
In summary, the trend of rising home prices over time suggests that homeownership can be a savvy financial decision for those ready to take on its responsibilities.
So, if you're ready for the costs and responsibilities of owning a home, it could be a good idea for you. If you’re ready to make a move, let’s chat! With our extensive experience as longtime residents of the Bay Area, we offer in-depth knowledge of micro-neighborhoods to assist you in identifying the perfect community for your lifestyle and skillfully negotiating to bring your vision to reality.
Article content courtesy of Keeping Current Matters
Graphs: Freddie Mac and KCM
