Spring is traditionally the busiest season for real estate. Buyers, experiencing cabin fever all winter, emerge like flowers through the snow in search of their dream home.
Historically Speaking, There’s No Housing Bubble Coming Soon!
Is the continued increase in Southern California home prices leading us to another housing bubble? We say No!
Let’s break this down. From 1975 to 1990, home values trended at standard 5% annual growth. In 1990, when the US entered into a recession, new construction prices fell. Single family resale residence pricing was flat. This resulted in an 8-10 year lull in the standard 5% annual growth. In 1999 the median housing prices began to catch up to 5% standards…then the balloon struck. 2004 through 2007 saw unsustainable price increases. It burst… prices decline in December 2012 to a low. Since 2013, We’ve been on pace to todays, 5% standard home price growth. Here’s the graph to support:
Recently, five housing experts weighed in on the question.
Rick Sharga, Executive VP at Ten-X:
“We’re definitely not in a bubble.”
“We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but…while prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars.”
Christopher Thornberg, Partner at Beacon Economics:
“There is no direct or indirect sign of any kind of bubble.”
“Steady as she goes. Prices continue to rise. Sales roughly flat.…Overall this market is in an almost boring place.”
Bill McBride, Calculated Risk:
“I wouldn’t call house prices a bubble.”
“So prices may be a little overvalued, but there is little speculation and I don’t expect house prices to decline nationally like during the bust.”
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices:
“Housing is not repeating the bubble period of 2000-2006.”
“…price increases vary unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”
Bing Bai & Edward Golding, Urban Institute:
“We are not in a bubble and nowhere near the situation preceding the 2008 housing crisis.”
“Despite recent increases, house prices remain affordable by historical standards, suggesting that home prices are tracking a broader economic expansion.”
To sum it up:
What we’re realizing is in-line with a 5% annual price growth. The sky isn’t falling nor is the market facing another apocalypse. One thing we do suggest, if you’re considering selling, now… today… is the perfect time. Inventory is at an all time low. Buyers are limited in their options and your home will likely get top dollar.
Call Us Now To Sell Your Home…
Office: 909.985.9392 or Text Us: 714.657.6634
The outlook for 2017 remains positive as well, as an additional 600 thousand properties will regain equity if home prices rise another 5% this year.
Selling your home is a matter of competition in today’s real estate. You’re competing with other like minded sellers all fighting for the right offer at the right from an eager buyer.
Do Your Future Plans Include a Move? What’s Stopping You from Selling Now? Are you an empty-nester? Do you want to retire where you are, or does a vacation
California Prop 60 and Prop 90 Property Tax Transfer Rates
Home Buyer Demand Continues To Outpace Homes For Sale. The price of any item is determined by the supply of that item, as well as the market demand.
Inventory Drops Again, Sales Slow. Inventory of existing homes for sale dropped to a 4.3-month supply, marking the 25th month in a row of declines.
Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.
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