Steve Harney

Trust is earned, respect is given. and loyalty is demonstrated. Betrayal of any one of those is to lose all three. - Ziad K. Abdelnour

[Steve Harney @SteveHarney]

Well…actually…you shouldn’t be using median sales prices.

In a market like this, median values are virtually meaningless. They have “no importance or value”. As evidence, I give you the Center for Real Studies at Wichita State University’s analysis of median sales prices:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less. While this is a good measure of the typical sale price, it is not very useful for measuring home price appreciation because it is affected by the ‘composition’ of homes that have sold.  

For example, if more lower-priced homes have sold recently, the median sale price would decline (because the ‘middle’ home is now a lower-priced home), even if the value of each individual home is rising.”

Their example is this market exactly: more lower priced homes are selling.

Home values have actually increased month-over-month in almost every re-peat sales index over the last nine months (ex. Case Shiller, FHFA, Freddie Mac, Black Knight, CoreLogic).

To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.

That’s why using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now. Most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house.

When mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. A greater number of ‘less-expensive’ houses are selling right now for this exact reason, and that’s causing the median price to decline. But that doesn’t mean any single house lost value.

[Steve Harney @SteveHarney]

The home price forecasts for 2024 have been adjusted UPWARD from forecasts just three months ago by these entities. To them, house values will continue to be resilient in this new year.

[Steve Harney @SteveHarney]

@PhilsFiles I’m going on 70. Mostly retired. Do a little consulting work.

[Steve Harney @SteveHarney]

People ask me why I am so obsessed with showing that housing values in this country are stable.

The reason? This graph shows that…right now…22% of Americans still believe home values will depreciate over the next 12 months. This is ~double the pre-pandemic percentage.

That concern might cause them to hesitate in either buying or selling this year.

That is also why I am doing a FREE webinar Monday morning on the subject.

[Steve Harney @SteveHarney]

What happened to home prices in 2023?
What’s about to happen to home prices in 2024?

I’ll answer both those questions in depth this Monday, March 4th.
Hope to see you there…BTW, it’s FREE!!

[Steve Harney @SteveHarney]

@PhilsFiles @To_the_bank Actually, I don’t sell houses.

[Steve Harney @SteveHarney]

@JoanDenaro Thank you for the kind words.

[Steve Harney @SteveHarney]

When someone says home values “always” go up and down, let them know that…over the last 43 years…that’s not true. As everyone knows, home prices depreciated during the Great Financial Crisis.

They appreciated the other 39 years.

[Steve Harney @SteveHarney]

@mrsunbubbles No, actually I don’t.

[Steve Harney @SteveHarney]

We must draw upon our “sisu” at times like this…

[Steve Harney @SteveHarney]

2 Thessalonians 3:13

“And as for you, brothers and sisters, never tire of doing what is good.”

[Steve Harney @SteveHarney]

@Nomandate4ever Okay?

[Steve Harney @SteveHarney]

@broganoff @BuzzedTrader @texasrunnerDFW A “list” price decrease is usually evidence of a misinformed and hopeful seller, not an indication the values are falling.

[Steve Harney @SteveHarney]

I will also be sharing the “estimated performance” of home prices over the next 5 years and what it could mean to a homeowner’s net worth.

[Steve Harney @SteveHarney]

What happened to home prices in 2023?
What’s about to happen to home prices in 2024?

I’ll answer both those questions in depth this Monday, March 4th.
Hope to see you there…BTW, it’s FREE!!

[Steve Harney @SteveHarney]

@Nomandate4ever Why won’t you?

[Steve Harney @SteveHarney]

@Nomandate4ever Could you give me JUST ONE town you were originally referring to so I don’t have to scour Google maps?

[Steve Harney @SteveHarney]

@Nomandate4ever Where?

[Steve Harney @SteveHarney]

@Nomandate4ever As a state, Minnesota appreciated 4.1% in 2023.
Where in Minnesota do you live?

[Steve Harney @SteveHarney]

@TraderSmith09 Please show me their predictions in 2022. I’d like to see them.

[Steve Harney @SteveHarney]

@To_the_bank Most analysis is done without adjusting for inflation. If you are using inflation adjusted numbers, please make sure you are just as vigilant in correcting the stock, gold and bitcoin guys with the same argument.

[Steve Harney @SteveHarney]

@diloreto 🙄

[Steve Harney @SteveHarney]

@ejbowlin Was at my son’s basketball game.
I don’t sit at my computer all day.

[Steve Harney @SteveHarney]

@To_the_bank These institutions don’t. Who is on your side of the argument?