Stability in Turbulent Times: Exploring the Factors Behind Resilient Home Prices

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), expects home prices to remain relatively stable despite the recent shifts in the housing market. While mortgage rates rose significantly last year, impacting affordability, and home prices peaked in the summer, the overall trend at the national level has been a flattening of prices. Yun anticipates this stability to persist moving forward.

[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”

The limited inventory in the housing market is a factor that is preventing prices from significantly declining, despite expectations of price reductions. With fewer homes available for sale, sellers have more leverage, and the competition among buyers remains high. This imbalance between supply and demand puts a floor on home prices and prevents them from dropping significantly. So, while sellers may not have to lower prices to attract buyers, the low inventory is playing a role in supporting home prices.

“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”

As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.

That lack of available homes on the market is putting upward pressure on pricesBankrate puts it like this:

“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”

If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, according to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:

“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”

You're correct that sellers currently have the advantage due to the abundance of equity and low mortgage rates. This situation reduces the likelihood of distressed sales and provides homeowners with a cushion against financial difficulties. However, given the limited inventory, it becomes crucial to partner with a knowledgeable real estate agent who has a deep understanding of your local market. They can guide you through the current market conditions and help you make informed decisions in the face of volatility.

Bottom Line

A lot of people expected prices would crash this year thanks to low buyer demand, but that isn’t happening. Why? There aren’t enough homes for sale. If you’re thinking about moving this spring, let’s connect.

111 Properties
Page 1 of 10
$1,950,000
Neighborhood: Oaks
4
Beds
3F11/2
Baths
4,135
Sq.Ft.
1994
Year Built
2
Days on Site
A4600134
MLS
$699,000
Neighborhood: Bay Oaks Estates
3
Beds
2
Baths
2,312
Sq.Ft.
1997
Year Built
4
Days on Site
A4599768
MLS
$2,400,000
Neighborhood: Sunset Place
4
Beds
4F11/2
Baths
4,747
Sq.Ft.
2003
Year Built
4
Days on Site
A4600621
MLS
$840,000
Neighborhood: Edgewater/Hidden Bay Bldg B Ph
3
Beds
2
Baths
1,937
Sq.Ft.
2019
Year Built
6
Days on Site
A4588243
MLS
Open 3/2
37 Bayhead Ln Osprey,  FL 34229
$777,000
Neighborhood: Oaks
3
Beds
2
Baths
2,168
Sq.Ft.
2001
Year Built
6
Days on Site
A4600903
MLS
$525,000
Neighborhood: Rivendell
2
Beds
2
Baths
1,604
Sq.Ft.
2000
Year Built
6
Days on Site
A4600898
MLS
Open 3/2
434 N Shore Dr Osprey,  FL 34229
$1,199,900
Neighborhood: Sorrento Shores
3
Beds
3
Baths
2,932
Sq.Ft.
1989
Year Built
7
Days on Site
N6131393
MLS
Open 3/3
1109 Scherer WAY Osprey,  FL 34229
$729,000
Neighborhood: Rivendell Woodlands
3
Beds
2
Baths
2,125
Sq.Ft.
2002
Year Built
7
Days on Site
A4599840
MLS
Open 3/3
260 Hidden Bay Dr #504 Osprey,  FL 34229
$1,050,000
Neighborhood: Edgewater/Hidden Bay Ph Ii Bld
2
Beds
2F11/2
Baths
1,950
Sq.Ft.
2019
Year Built
7
Days on Site
A4589709
MLS
$1,199,000
Neighborhood: Meridian At The Oaks Preserve
4
Beds
3
Baths
2,778
Sq.Ft.
2000
Year Built
8
Days on Site
A4600762
MLS
$438,880
Neighborhood: Bay Street Village
3
Beds
2
Baths
1,430
Sq.Ft.
2016
Year Built
10
Days on Site
A4600382
MLS
$1,100,000
Neighborhood: Park Trace Estates
5
Beds
4F11/2
Baths
3,420
Sq.Ft.
2003
Year Built
11
Days on Site
A4600014
MLS

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