Is this the great deceleration we've been waiting for?  Are the big jumps in home prices behind us?

Hi everybody and happy holidays to you all.  Joe Hillner with Your Home Sold Guaranteed Realty, where we will sell your home for just a 1% commission, guaranteed! 
Ok, so every week, I share market data to keep you informed with the local real estate market.  
Here is this week’s Boca Market Watch.

First, Single Family Homes:

This past week, an off week, with only 29 new homes on the market, ranging from $370,000 to $6.4M!  23 homes back on the market, while 11 homes listed took a price decrease, and 9 sellers raised their asking price.  And  a lackluster week with 31 different properties under contract, and 21 going pending.  And 35 homes were unsuccessful in selling and were taken off the market or the listing expired outright. That might sound like a lot but most agents have their listing contracts expire on the last day of the month.  So in a more normal inventory situation, that number would be well over a hundred.  And a pretty blah week for sales with 43 homes closed in the past week,  ranging from $336K to $7 Million

Next up, Condos and Townhomes:

50 new listings, not horrible, and ranging from $75 Grand to $4.65 Million.  
17 units came back on the market, 24 properties with a price decrease, and 7 sellers with an increase.  35 different properties went under contract, and another 40 went pending.  And 40 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 82 closed sales this week, another decent week for condos, and ranging in price from $45 Grand to $5.5 Million!

Here's what's making news right now.

Home values just posted their second consecutive month of decelerating price growth. Here’s why it will continue to slow.

According to an article in Forbes, here's the bad news for homebuyers: Over the past year, the U.S. has seen the fastest period for home price growth in recorded history—even greater than any of the years leading up to the 2008 housing bubble. The silver lining: Home values just posted their second consecutive month of decelerating price growth.

Year over year, U.S. home prices rose 19.1% between October 2020 and October 2021, according to the S&P CoreLogic Case-Shiller Index, the leading measure of residential real estate prices. That’s down from the all-time high of a 19.8% home price increase between August 2020 and August 2021, meaning that home price growth started to cool in the autumn. 

But that slowdown is bigger than it might first appear. See, that year-over-year period still includes the frenzied 2021 spring housing market, during which bidding wars hit an all-time high. When you look at the last two months for which data is available, September and October, home prices rose 0.8% month over month, which is significantly lower than the 2.3% spike between March and April.

However, home shoppers should not mistake this latest slowdown as price relief. After all, the 19.1% uptick in home prices is far above the average 3.2% pay raise workers can expect this year. That said, there’s a growing consensus among industry insiders that the deceleration in home price growth is just getting started. 

And that price growth slowdown has the potential to be even more substantial if the Fed pushes interest rates up by more than expected because of inflation concerns. If the interest rate of the average 30-year fixed mortgage (currently at 3.2%) were to rise even half a percent, it would have the potential to lock out some buyers from the market altogether, lower demand, and lower levels of home price growth.

Daryl Fairweather, chief economist at Redfin said, “Mortgage rates will rise to 3.6% [this year], bringing price growth down to earth…This low price growth will likely discourage speculators from entering the market and allow more first-time buyers to have a chance at winning a home,”. In the same report, Redfin predicts that annual home price growth in 2022 will plunge to 3%. If that happens, it would be the slowest year-over-year change in home prices since 2012.

That assessment of continued price growth deceleration in 2022 was shared by every forecast model reviewed by Fortune. Among the eight industry models they looked at, the most bullish are clearly by Zillow (predicting 11% home price growth in 2022) and Goldman Sachs (predicting an annualized rate of 12.6%). 

While those forecasts would mark a serious numerical dip from the 19.1% we’ve seen over the past 12 months, they still predict a market in which home prices are growing at more than double the average annual rate  they’ve grown since 1980 (4.6%). Home price growth forecasts by Freddie Mac (7%) and Fannie Mae (7.9%) would also mark an above-average year.

Meanwhile, joining Redfin on the more bearish side are Realtor.com (forecasting 2.9% home price growth in 2022) and CoreLogic (1.9%). And the Mortgage Bankers Association, which is predicting the median price of existing homes will drop 2.5% by the end of 2022, has the lone model predicting a price drop.

So what does it all mean?  Price increases are likely to slow down.  But as to how much they will slow, or how low they will go, no one really knows, so you may as well ask your know-it-all neighbor, lol!