Home Prices Still Growing – Just at a More Normal Pace: What This Means for the Portland Metro and Surrounding Real Estate Markets in 2023

If you’re feeling a bit muddy on what’s happening with home prices, that’s no surprise. Some people are still saying prices are falling, even though data proves otherwise. Part of that misconception is because people are getting their information from unreliable sources. But it’s also coming from some media coverage misrepresenting what the data really shows.

So, to keep things simple, here’s what you really need to know using real data you can trust.

Understanding the Seasonal Nature of Home Prices

The housing market experiences predictable fluctuations throughout the year, known as seasonality. Spring marks the peak of home buying, with a high level of market activity. This momentum usually extends into summer but gradually decreases as autumn and winter set in.

Home prices follow along with seasonality because prices appreciate most when something is in high demand. That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show the typical percent change for monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

The graph reveals that home prices typically increase at the start of the year, but the most significant growth occurs during the spring and summer months. This pattern aligns with the peak homebuying season. As we move into the cooler months, prices continue to grow, albeit at a slower pace, reflecting the reduced market activity.

This Year, Seasonality Has Returned

Now, let’s look at how this year compares to that long-term trend (see graph below):

Here’s the latest data for this year from that same source. Just like before, the dark bars are the long-standing trend. The green bars represent what’s happened this year. As you can see, the green bars are beginning to fall in line with what’s normal for the market. That’s a good thing because it’s more sustainable price growth than we’ve seen in recent years.

In a nutshell, nationally prices aren’t falling, it’s just that price growth is beginning to normalize. Moving forward, there’s a chance the media will misrepresent this slowing of home price growth as prices falling. So don’t believe everything you see in the headlines. The data included here gives you the context you need to really understand what’s happening. So, if you see something in the headlines that’s confusing, don’t just take it at face value. Ask a trusted real estate professional for more information.

Home prices are not falling; they are simply rising at a more moderate and sustainable pace, in line with typical market seasonality. If you’re puzzled by conflicting headlines or need more information, don’t hesitate to consult a trusted real estate expert.

Bottom Line

Remember, a return to normal in home price appreciation is a positive sign. If you have any questions about local price trends or need guidance in navigating the market, let’s connect and discuss how these changes impact you.