Why the Median Home Price Is Meaningless in Today’s Market

The National Association of Realtors (NAR) will release its latest Existing Home Sales (EHS) report later this week. This monthly report provides information on the sales volume and price trend for previously owned homes. In the upcoming release, it’ll likely say home prices are down. This may feel a bit confusing, especially if you’ve been following along and seeing the blogs saying that home prices have bottomed out and turned a corner. So, why will this likely say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each report. NAR reports on the median sales price, while some other sources use repeat sales prices. Here’s how those approaches differ. The Center for Real Estate Studies at Wichita State University explains median prices like this: “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 . . . 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.” Investopedia helps define what a repeat sales approach means: “Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.” The Challenge with the Median Sales Price Today As the quotes above say, the approaches can tell different stories. That’s why median price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again. Bill McBride, Author of the Calculated Risk blog, sums the difference up like this: “Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.” 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 buyers look at home prices as a starting point to determine if they match their budgets. But, 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.  When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates. Bottom Line For a more in-depth understanding of home price trends and reports, reach out to a local real estate professional.     Why the Median Home Price Is Meaningless in Today's Market in San Antonio, TX: A Comprehensive Analysis by Grell Realty Group   In today's dynamic real estate market, relying solely on the median home price as a measure of affordability or value can be misleading. San Antonio, TX, is no exception, as the local real estate landscape undergoes significant shifts and trends. In this comprehensive analysis, we will delve into why the median home price may not accurately reflect the current market conditions and discuss the factors that influence home prices in San Antonio. The expert insights and services of Grell Realty Group and The Grell Team will be your guiding force throughout this exploration. 1. Understanding the Median Home Price:The median home price is a statistical value that represents the middle point in a set of home sale prices, where half of the properties sold for more and half sold for less. It is often used as a benchmark to gauge affordability and general market trends. However, it has limitations in capturing the nuances of today's real estate market, particularly in San Antonio. 2. Variability in Property Types:San Antonio offers a diverse range of property types, including single-family homes, condos, townhouses, and multi-family dwellings. Each property type has its own price range and unique market dynamics. The median home price fails to differentiate between these property types, resulting in a generalized figure that may not accurately reflect the segment of the market that interests you. The Grell Team specializes in understanding these property nuances, ensuring that you receive tailored guidance and accurate information based on your specific needs. 3. Neighborhood and Location Factors:The location and neighborhood of a property have a significant impact on its value. San Antonio is a city with various neighborhoods, each with its own character, amenities, and desirability. The median home price does not consider these location-based factors, which can greatly influence a property's market value. The Grell Realty Group's local expertise allows them to provide detailed insights into specific neighborhoods, helping you make informed decisions that align with your preferences and investment goals. 4. Property Size, Features, and Upgrades:Home prices are heavily influenced by factors such as square footage, number of bedrooms and bathrooms, lot size, and overall condition. The median home price fails to account for these specific attributes and any additional features or upgrades a property may offer. The Grell Team understands the importance of these details and can assist you in finding homes that align with your desired size, amenities, and lifestyle preferences. 5. Supply and Demand Dynamics:The real estate market in San Antonio, like any other city, is subject to supply and demand forces. Fluctuations in inventory levels and buyer demand can greatly impact home prices. The median home price does not consider these dynamic factors, resulting in a generalized representation that may not accurately reflect the market conditions at any given time. The Grell Realty Group constantly monitors market trends, providing you with up-to-date information on supply and demand dynamics that may influence your buying or selling decisions. 6. Market Conditions and Economic Factors:The overall economic climate, interest rates, and local market conditions play a vital role in determining home prices. San Antonio's real estate market is influenced by factors such as job growth, population trends, and development projects. These factors can cause prices to fluctuate independently of the median home price. The Grell Team possesses a deep understanding of the local market and can provide valuable insights into these economic factors, empowering you to make informed decisions that align with your financial goals. Conclusion:While the median home price may serve as a general indicator of market trends, it fails to capture the intricacies and unique dynamics of today's real estate market in San Antonio, TX. Relying solely on this metric can be misleading and may not provide an accurate representation of the value or affordability of properties. The expert guidance and comprehensive services offered by Grell Realty Group and The Grell Team ensure that you have access to accurate and detailed market information, enabling you to navigate the San Antonio real estate market with confidence. Contact Grell Realty Group today to partner with experienced professionals who prioritize your needs and help you make informed decisions in this evolving market.

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Why Buying or Selling a Home Helps the Economy and Your Community

If you're thinking about buying or selling a house, it's important to know that it doesn't just affect your life, but also your community. The National Association of Realtors (NAR) releases a report every year to show how much economic activity is generated by home sales. The chart below illustrates that impact: As the visual shows, when a house is sold, it can make a big difference in the local economy. The impact comes largely from the workers required to build, update, and buy and sell homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains how the housing industry adds jobs to a community: “The economic impact means housing is a significant job creator. In fact, for every single-family home built, enough economic activity is generated to sustain three full-time jobs for a year, per NAHB research. . . . And one job for every $100,000 in remodeling spending.”  Housing being a major job creator makes sense when you consider there are many different industries involved in the process. A recent article from Fortune notes housing activity could have a more robust impact than you think due to the many ways it’s tied to the economy: “Housing has three direct linkages to economic activity (GDP): the construction of new homes, the remodeling of existing homes, and that of housing transactions. . . . consider the activity associated with home sales – think broker fees, lawyers, etc. – which are a sizable contributor to housing’s GDP footprint.”  When you buy or sell a home, you work with a team of professionals, including contractors, specialists, lawyers, and city officials. Each person plays a role in making the transaction happen.  So, when you make a move in the housing market, you're not just meeting your own needs, you're also making a positive impact on the community. Knowing this can give you a sense of empowerment as you make your decision this year. Bottom Line Each and every home sale is important for the local economy. If you’re ready to move, reach out to a trusted real estate agent. It won’t just change your life – it’ll also have a strong positive effect on the whole community.     The Economic Impact of Buying or Selling a Home: Strengthening Your Community in San Antonio, TX Buying or selling a home is not only a significant personal milestone but also a powerful driver of economic growth and community development. In San Antonio, TX, the real estate market plays a vital role in bolstering the local economy. In this detailed blog post, we will explore the many ways in which buying or selling a home contributes to the economic vitality of San Antonio and benefits the community as a whole. Join us as we delve into the impact of real estate transactions, with the expert insights of Grell Realty Group and The Grell Team guiding our exploration. 1. Job Creation and Economic Stimulus:The real estate industry, including buying and selling homes, generates substantial employment opportunities. From real estate agents and brokers to mortgage lenders, appraisers, inspectors, contractors, and more, each transaction creates a ripple effect, supporting numerous jobs in related sectors. By engaging Grell Realty Group and The Grell Team, you contribute to local job creation and foster economic growth in San Antonio. 2. Increased Consumer Spending:The process of buying or selling a home involves various expenses, such as closing costs, moving services, home renovations, and furniture purchases. These expenditures inject money into the local economy, benefiting local businesses and stimulating consumer spending. From furniture stores to home improvement contractors, your real estate transaction supports a wide range of businesses and strengthens the local retail sector. 3. Real Estate Tax Revenues:Property taxes are a significant source of revenue for local governments. When you buy a home, you contribute to the property tax base, which helps fund essential community services and infrastructure projects, including schools, roads, parks, and public safety initiatives. By paying property taxes, you directly contribute to the development and improvement of your community. 4. Neighborhood Revitalization:When homes are bought and sold within a community, it promotes neighborhood revitalization. New homeowners often invest in property renovations and improvements, enhancing the overall aesthetic appeal and increasing property values. This, in turn, encourages other homeowners to invest in their properties, leading to a positive cycle of community development. The Grell Team's expertise in identifying areas primed for growth can help you find homes that align with your vision for community development. 5. Support for Local Businesses:A thriving real estate market provides opportunities for local businesses to flourish. From home inspectors and contractors to landscapers and interior designers, real estate transactions create a demand for their services. By choosing Grell Realty Group and The Grell Team, you contribute to the success of local businesses and foster a robust entrepreneurial ecosystem in San Antonio. 6. Attraction of Investments:A vibrant real estate market attracts outside investments and economic development opportunities. When potential investors observe a healthy housing market, they gain confidence in the local economy and are more likely to invest in commercial properties, businesses, and infrastructure projects. Your participation in real estate transactions indirectly contributes to the overall economic attractiveness and growth potential of San Antonio. 7. Community Building and Social Impact:Buying or selling a home often involves engaging with the local community and forging connections. It presents opportunities to establish roots, participate in neighborhood associations, support local events, and contribute to the social fabric of your community. Grell Realty Group and The Grell Team prioritize community building and can provide valuable insights into San Antonio's vibrant communities. Conclusion:Buying or selling a home in San Antonio, TX, extends far beyond the personal benefits of homeownership. It plays a pivotal role in supporting local economies, creating jobs, and fostering community development. By choosing Grell Realty Group and The Grell Team, you align yourself with professionals committed to maximizing the positive impact of your real estate transactions. Together, we can build stronger communities and contribute to the economic vitality of San Antonio. Contact Grell Realty Group today to embark on your real estate journey with purpose and impact.

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Oops! Home Prices Didn’t Crash After All

During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts: Jeremy Siegel, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business: “I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.” Mark Zandi, Chief Economist at Moody’s Analytics: "Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.”  Goldman Sachs:  “Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.” The Bad News: It Rattled Consumer Confidence These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the December Consumer Confidence Survey from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year. The Good News: Home Prices Never Crashed However, home prices didn’t come crashing down and seem to be already rebounding from the minimal depreciation experienced over the last several months.  In a report just released, Goldman Sachs explained: “The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ” Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: Case-Shiller and the FHFA. Here are the numbers each reported: Home values seem to have turned the corner and are headed back up. Bottom Line The housing market is much stronger than many think. To get a true evaluation of your local market, reach out to a trusted real estate professional.     The Resilient Real Estate Market: Grell Realty Group's Impact on San Antonio and Boerne, Texas In recent years, the real estate market has experienced its fair share of ups and downs. Speculations and predictions of a looming crash often dominate headlines, leaving homeowners, buyers, and sellers uncertain about the future. However, San Antonio and its neighboring city, Boerne, have defied the odds, with the help of the reputable Grell Realty Group. In this blog post, we will explore how the real estate market in San Antonio and Boerne remained strong and resilient, debunking the fears of a crash, and showcasing the key role played by the Grell Realty Group in this remarkable success story. Economic Stability and Population Growth: San Antonio and Boerne boast a strong and diverse economy, providing a solid foundation for the real estate market. The region has experienced consistent job growth across various sectors, including healthcare, technology, and finance. This stability, coupled with a steady influx of new residents, has fueled the demand for housing, ensuring the market's stability. The Grell Realty Group, a leading real estate agency in the area, has adeptly navigated these factors, providing exceptional services to clients and contributing to the market's resilience. Unmatched Expertise of Grell Realty Group: Grell Realty Group, with their extensive knowledge and expertise in the San Antonio and Boerne real estate markets, has played a pivotal role in driving growth and mitigating risks. Their team of experienced agents possesses an in-depth understanding of local trends, pricing dynamics, and investment opportunities. By providing valuable insights, personalized advice, and top-notch customer service, the Grell Realty Group has built a solid reputation and helped countless clients make informed decisions in an uncertain market. Diversification and Smart Investments: One of the key reasons the real estate market in San Antonio and Boerne weathered potential crashes is the emphasis on diversification and smart investments. Grell Realty Group has been instrumental in guiding buyers and investors towards profitable opportunities beyond traditional single-family homes. The team's expertise extends to commercial properties, rental properties, and land development projects, ensuring clients have a well-rounded portfolio that can withstand market fluctuations. Market Demand and Housing Affordability: Unlike some other major cities in the United States, San Antonio and Boerne have managed to strike a balance between market demand and housing affordability. The region offers a range of options, including affordable starter homes, mid-range properties, and high-end luxury estates. Grell Realty Group has played a significant role in matching buyers with homes that fit their budget and preferences, ensuring that the market remains robust and accessible to a diverse range of buyers. Strong Community and Lifestyle Factors: San Antonio and Boerne are renowned for their strong sense of community, rich cultural heritage, and vibrant lifestyle offerings. These factors contribute to the region's desirability and make it an attractive place to live, work, and invest. The Grell Realty Group understands the value of these intangible aspects and effectively showcases them to potential buyers. By highlighting the region's unique attractions, such as the historic River Walk in San Antonio and the charming small-town feel of Boerne, Grell Realty Group has played a significant role in driving demand and maintaining a thriving real estate market. Infrastructure and Development Initiatives: San Antonio and Boerne have seen substantial infrastructure and development initiatives in recent years. These projects have enhanced the overall quality of life, attracted businesses, and stimulated the real estate market. From improved transportation networks to the establishment of educational and healthcare facilities, the region has witnessed significant progress. The Grell Realty Group keeps a close eye on these developments, providing clients with valuable information about areas poised for growth, ensuring they make informed investment decisions. Conclusion: Contrary to the fears of a real estate crash, the San Antonio and Boerne markets have demonstrated remarkable resilience. The Grell Realty Group's unwavering commitment to providing exceptional service, their expertise in local market dynamics, and their focus on diversification and smart investments have played a crucial role in maintaining a stable and thriving real estate market. As the region continues to grow and evolve, the Grell Realty Group will undoubtedly continue to be at the forefront, guiding clients towards successful real estate transactions and fostering continued market stability.

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