Are Home Prices Approaching Bubble Territory?

Posted by Andreas Holder on Thursday, June 22nd, 2017 at 5:09pm.

Home values continue to rise nationwide and many are wondering whether we are heading towards another bubble. Zillow recently 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."

That is a correct statement but we must understand that just comparing 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).

It shows that prices rose during the early 2000s, fell during the crash and have risen since 2013.

For comparison, let’s assume there was neither a housing bubble or a 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).

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

If you ever wonder what your home is worth today, ask Andreas for a complimentary home evaluation. 

 

Andreas Holder, Chicago Real Estate AgentAre you thinking about buying a home this year in Chicago? Andreas Holder can help! Let him be your guide to the downtown Chicago real estate market and help you find a home that not only matches your needs, but your lifestyle too.
Learn more about Andreas or start your home search now.

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