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
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As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.
Lower-priced homes have appreciated at greater rates than homes at the upper ends of the spectrum due to demand from first-time home buyers and baby boomers looking to downsize.
If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018! Let’s get together to evaluate your situation!
The average homeowner gained approximately $14,900 in equity during the past year. Compared to Q3 2016, negative equity decreased 22% from 3.2 million homes, or 6.3% of all mortgaged properties. U.S. homeowners with mortgages (roughly 63% of all homeowners) have seen their equity increase by a total of $870.6 billion since Q3 2016, an increase of 11.8%, year-over-year.
One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.
The National Association of REALTORS® surveyed their members for their Confidence Index.
There’s a lot of discussion about the current state of housing affordability for both first-time and move-up buyers. Much of the narrative is tarnished with a negative slant.
Low Housing Inventory Results in Double Digit Price Increases. If you are a first-time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.
As an owner, your mortgage payment is a form of ‘forced savings’. This allows you to build equity in your home. You can tap into this equity later in life if you choose. As a renter, you guarantee the landlord is the person with that equity.
Each year, most homeowners wait until the spring to sell their houses because they believe that they can get a better deal during the normal spring buyer’s
Make sure all the information listed on your report is accurate and work to correct any mistakes.
The inventory of homes for sale has fallen year-over-year for the last 28 months and has had an upward impact on home prices.
We’re sharing some very exciting news today for First Time Homebuyers! New California State Programs are making homeownership a reality for first time homebuyers. Owned a home in the past?
Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!
That headline might be a little aggressive; however, as August 2017’s housing market data begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME TODAY!
As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.