Are Home Prices Approaching Bubble Territory?

market-bubbleAs home values continue to rise, some are concerned about another housing bubble.

Zillow just reported:

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

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

median-sale-pricesYou can see 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 10 years.

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



Real Estate Bottom Line

Had there not been a real estate boom and bust, home values would essentially be where they are right now.  If you are thinking about purchasing a home, let’s connect so I can answer your questions.

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