Have Home Values Hit Bottom?

Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already be behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?

Let’s take a look at the latest data from the Cromford Report using Phoenix Area home sale data:

January is still not over, but of the homes that have closed this month, prices appear to be rebounding and are actually up 1.7%. That might not feel like a lot, but the median priced home in Metro Phoenix in December was $415,000. 1.7% is about another $7,000 in home value.

While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us.

Bottom Line

Home prices month-over-month have depreciated but January is showing a bit of a rebound so far, but there’s a strong case to be made that the worst may be behind us. If you have questions about what’s happening with home prices in our local market, let’s connect.