Home Values Rise Even as Median Prices Fall

The real estate market in Cincinnati and Northern Kentucky has seen headlines recently about the median asking price of homes dropping compared to last year, leading to confusion for both buyers and sellers. Many assume this means home prices are declining, but the reality is more complex, and understanding the local market trends is key.

On a national level, home values are actually increasing, even if the median price appears to be down. Let’s break down what’s happening so you can better understand the real estate market in Cincinnati, Northern Kentucky, and beyond without getting caught up in alarming headlines.

### Homes on the Market Right Now Are Smaller
One major reason for the dip in the median asking price is that the homes being sold right now are generally smaller. The median price reflects the middle point of all homes for sale at a given time, and this can change based on the mix of homes on the market.

Here’s a simple explanation of how the median works (see visual below). Imagine you have three coins of different values. If you have one nickel and two dimes, the median value is 10 cents. If you switch it to two nickels and one dime, the median drops to five cents, even though the value of each coin remains the same. Similarly, while there are more smaller homes on the market, home values themselves haven’t decreased.

Danielle Hale, Chief Economist at Realtor.com, explains it this way:

> “The share of inventory of smaller and more affordable homes has grown, which helps hold down the median price even as per-square-foot prices grow further.”

In Cincinnati and Northern Kentucky, the availability of more affordable, smaller homes could be influencing this trend locally, but it doesn’t mean the value of homes is falling.

### Price Per Square Foot Is Still Rising
A more accurate way to measure home values, especially in the Cincinnati and Northern Kentucky housing markets, is by looking at the price per square foot. This gives you a clearer picture of how much you’re paying for space within the home, regardless of the overall size of the property.

While the median asking price may be lower due to a mix of smaller homes, the price per square foot continues to rise, reflecting the true value of homes. The latest national and local data shows that even as the median asking price drops, home values are still on the rise. As Ralph McLaughlin, Senior Economist at Realtor.com, states:

> “When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.”

This trend is also seen in the Cincinnati and Northern Kentucky real estate markets. Though the region may have more smaller homes on the market right now, their price per square foot is still increasing, showing that overall home values are appreciating.

According to the Federal Housing Finance Agency (FHFA):

> “Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.”

So while headlines might make it sound like home prices are falling, it’s important to dig deeper into the data. In Cincinnati and Northern Kentucky, homes are still appreciating, and the market remains strong.

### Local Market Trends Matter
Remember, home prices can vary widely by region. The real estate market in Cincinnati and Northern Kentucky may experience different conditions than national trends, so it’s essential to consult with a knowledgeable local real estate agent. They can provide insights specific to your neighborhood, helping you understand whether it’s the right time to buy or sell.

### Bottom Line
A decrease in the median asking price doesn’t mean home values are declining in Cincinnati or Northern Kentucky. Instead, the lower median price is largely due to the increasing share of smaller, more affordable homes on the market. The most reliable metric to focus on is the price per square foot, which continues to rise, indicating that home values are still climbing.

If you’re curious about home prices in Cincinnati, Northern Kentucky, or your specific neighborhood, reach out to a trusted local real estate agent who can provide tailored advice based on the latest market trends in your community.