Home Values DEFINITELY NOT In Bubble Range

Dated: 11/29/2016

Views: 407

There are some industry pundits claiming that residential home values have risen too quickly and that current levels are on the verge of another housing bubble. It is easy to see how this thinking has taken form if we look at a graph of home prices from 2000 to today.


Home Values: DEFINITELY NOT in Bubble Range!! | Simplifying The Market

The graph definitely looks like a rollercoaster ride. And, as prices begin to reach 2006 levels again, it “seems logical” that the next part of the ride would be downhill. However, this graph includes the anomaly of the price bubble and the correction (the housing crash).


What if the bubble & bust didn’t occur?


Let’s assume that instead of the rise and fall in home prices that we saw last decade, we just had normal historic appreciation from 2000 to today. According to the 100+ experts that are surveyed for the Home Price Expectation Survey, normal annual appreciation for residential single family homes from 1987 to 1999 was 3.6%.


Starting with the median home price in 2000, we added 3.6% to it each year since then. Here is that graph intermixed with the above graph.


Home Values: DEFINITELY NOT in Bubble Range!! | Simplifying The Market
What this shows us is that, had the bubble and crash not occurred and instead we just had normal annual appreciation over this period, prices would actually be greater than they are today.


Bottom Line


There is no reason for alarm as prices seem to be right in line with where they should be.

Julie Baldino - Owner-Managing Broker

Julie Baldino is a seasoned veteran of the Pacific Northwest real estate industry, and has consistently been in the top 10% in sales for over a decade in 2 states. In order to accommodate a rapidly ex....

Want to Advertise on this Site?

Latest Blog Posts

The True Cost Of Not Owning A Home

There are a lot of reasons why owning is better than renting, here are a few reasons comparing the cost of not owning a home:1- The Price is so CloseRenters are facing increases everyday. With

Read More

Three Tips For Making An Offer

1- Determine a Price RangeThis should happen right before you start the homebuying process. If you don’t know how much you can afford, you will be shopping in the dark with a blank check

Read More

Spacious Longview Home For Sale 230 St James CT Longview 98632

Located in Longview, WA. Built in 2000, This sprawling & spacious home backs to a green space with wildlife and trees for a peaceful retreat! At 3604 sq. ft. This beautiful 5 bedroom, Daylight Ranch

Read More