Real Estate Myths You Need To Know

The real estate game is competitive. If you're following our market updates and other housing market news, chances are you've heard some misinformation. While Oahu's housing market is shifting, sometimes you don't get the full picture, and when that happens, it can become hard to seperate fact and fiction - that's where we come in. At Pineapple Group, we are dedicated to help debunk the headlines so you can fully understand the innerworkings of the current market and how it can impact you.

Here are three common housing market myths you might be hearing, along with the expert analysis that provides better context.

Myth 1: Home Prices Are Going To Fall

Chances are, you've probably been spooked with information saying home prices are going to crash and the housing bubble will burst. That's because the news headlines use similar, but different, terms to describe what’s happening with prices. Here's some terms you might be seeing right now:

  • Appreciation, or an increase in home prices.
  • Depreciation, or a decrease in home prices.
  • Deceleration, which is an increase in home prices, but at a slower pace.

Now heres the truth. Experts aren't predicting a decrease in prices, they're actually saying appreciation will continue, just at a slower pace. That means home prices will rise, not fall. Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

“. . . higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Myth 2: The Housing Market Is in a Correction

Another common myth is that the housing market is in a correction. Again, that’s not the case. Here’s why. According to Forbes:

“A correction is a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.”

As mentioned above, home prices are still appreciating, and experts project that will continue, just at a slower pace. That means the housing market isn’t in a correction because prices aren’t falling. It’s just moderating compared to the last two years, which were record-breaking in nearly every way.

Myth 3: The Housing Market Is Going To Crash

Some headlines are generating worry that the housing market is a bubble ready to burst. But experts say today is nothing like 2008. One of the reasons why is because lending standards are very different today. Logan Mohtashami, Lead Analyst for HousingWire, explains:

“As recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter. This typically happens in a recession, however, the notion that credit lending in America will collapse as it did from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom in the period between 2008-2022.”

During the last housing bubble, it was much easier to get a mortgage than it is today. Since then, lending standards have tightened significantly, and purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash.

No matter what you’re hearing about the housing market, let’s connect. That way, you’ll have a knowledgeable authority on your side that knows the ins and outs of the market, including current trends, historical context, and so much more.

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