Are Home Prices Approaching Bubble Territory

Dated: 06/15/2017

Views: 103

Are Home Prices Approaching Bubble Territory? | MyKCM
As home values continue to rise, some are questioning whether we are approaching another housing bubble. Zillow just reported that:

“National home values have surpassed the peak hit during the housing bubble and are at their highest value in more than a decade.”

Though that statement is correct, we must realize that just catching prices of a decade ago does not mean we are at bubble numbers. Here is a graph of median prices as reported by the National Association of Realtors (NAR).

Are Home Prices Approaching Bubble Territory? | MyKCM

We can see that prices rose during the early 2000s, fell during the crash and have risen since 2013.

However, let’s assume there was no housing bubble and crash and that home prices appreciated at normal historic levels (3.6% annually) over the last ten years.

Here is a graph comparing actual price appreciation (tan bars) with what prices would have been with normal appreciation (blue bars).

Are Home Prices Approaching Bubble Territory? | MyKCM

Bottom Line

As we can see, had there not been a boom and bust, home values would essentially be where they are right now.

David Nelson

2016 Associate of the Year - RE/MAX Advantage Plus 2016 Platinum Award winner - Individual 2016 Titan Award - Imperial Home Team Twin Cities Real Estate Agent of the Month - December 2016 I have....

Want to Advertise on this Site?

Latest Blog Posts

The Cost Of Renting Vs Buying In The US INFOGRAPHIC

Some Highlights: Historically, the choice between renting or buying a home has been a tough decision. Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the

Read More

The Importance Of Home Equity In Retirement Planning

We often discuss the difference in family wealth between homeowner households and renter households. Much of that difference is the result of the equity buildup that homeowners

Read More

The Supply Demand Problem Plaguing New Construction

Many real estate economists have called on new home builders to ramp up production to help relieve the shortage of inventory of homes for sale throughout the United States. The added inventory would

Read More

Do You Know How Much Equity You Have In Your Home

CoreLogic’s latest Equity Report revealed that 91,000 properties regained equity in the first quarter of 2017. This is great news for the country, as 48.2 million of all mortgaged

Read More