Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The rise in US house prices since the recession has created a market favorable for sellers.
In more than half of the country's largest metros, homes are worth more today than before the recession, according to Zillow's October housing market report.
Nationally, home values rose 6.5% over the past year to a median of $203,400.
For the 15th consecutive month, US home values have increased by at least 6%, according to Zillow's October housing market report.
That's double the annual rate of appreciation of a "normal" market, says Svenja Gudell, Zillow's chief economist.
Compared to October 2016, the median home in the US gained $12,500 in value as housing inventory remains low and demand surges. What's more, in over half of the country's largest metros, homes are worth more than they were before the recession.
"We are in the midst of an inventory crisis that shows no signs of waning, impacting potential buyers all across the country," Gudell said.
"Home values are growing at a historically fast pace, and those potential buyers want to get in the market while they still can," she continued. "But with homes gaining so much value in just one year, buyers – especially first-time buyers – have to set aside more and more money for a down payment just to keep up with them."
Some West Coast markets have seen huge gains. The median home value in San Jose rose 12.3%, or $118,200, since last October, according to Zillow. San Jose's median home value is up to $1.08 million.
In Seattle, the metro with the second-biggest gains, home values rose 11.7% year-over-year to$457,700.
Ultimately though, lower-valued homes nationwide are experiencing the largest increase in value, according to Zillow, gaining 8.4% over the last year. The median for homes valued in the bottom third of all homes nationwide is now $118,200. Meanwhile, the typical home value in the top-third rose only 3.8%, to $358,900
Home prices in America are increasing at double the rate of a 'normal' housing market
We have been having a housing price bubble in my neighborhood here in suburban New Orleans for the last 2-3 years, although the prices are far lower than in Seattle.
I bought my "dream home" here in the early summer of 2015, and I love my house and neighborhood. I never want to move again. So news like this is more amusing than distressing to me. I think the price increases are beginning to slow down this fall in my neighborhood, but prices are still so high and not dropping.
This must be a very difficult situation for buyers, especially for young people looking for their first home. I can sure sympathize, and wish the best for them.
When markets behave in irrational moves there is usually a reversion to the mean at some point. Actually, maybe the word irrational is incorrect as it makes perfect sense given the Fed's mandate to prop up asset prices by keeping interest rates too low for too long. Home prices have historically increased by 1-2% per year not 20-30%! No one can say this normal.
I certainly understand the Fed's rationale during and following the financial crisis to lowering rates & doing what it can to spur spending back into the economy by inflating asset prices but the Fed's policy should have stopped during Bernake's final years and Yellen should have been raising much sooner. The Fed should be lowering rates during slowdowns and raising rates during expansive times. How high or overvalued does the Fed wish for asset prices to climb? I find it funny how in the latest Fed statement there is concern for equity valuations- RAISE the RATES!!! Why sit back idly & let the train continue increase speed to derail on the next turn?
Interesting article, but IMO the headline is misleading. Makes it sound like what's happening in a few metro areas is happening to America in general. Wish that was the case, but in reality, I'd guess less than 10% of the neighborhoods in America are seeing this. And in some of the the metro areas that are experiencing the rapid increase, there are plenty of areas where neighborhoods where prices haven't recovered all that much since 2006.
It's been like that in the Boston area for years now. It's getting so bad that it seems that the only people who can afford to buy in the Boston area are people coming from California or NYC where prices are even higher.
Here's a record setter at $37.5 million. Before that, the record back in 2015 was a mere $15.4 million.
The Boston economy has been going great, wasn't even that much affected by the last recession, and who knows when it will finally slow down? I think the bubble has to burst some time.
Ours is a volatile, rapidly rising home price area. However, while 'asking prices' are rapidly increasing, actual sales prices --- not so much. It's nothing like 2005-07/8 when every listing sold soon after it hit the market.
It's difficult to say what's 'normal' these days. Prices may be going-up, but, the unregulated lending issues that ultimately burst the 2008 'RE bubble' have largely been corrected. There may be some price adjustment/corrections in some volatile areas, but, it's a different RE and lending environment now.
This is Zillow's graph of home values for my zip code. Don't know how they calculate it, but I have been keeping track of sales prices (not asking prices), and in my immediate neighborhood (which is just part of the zip code), they are going up even more sharply than this. It's so ironic that this would happen at the only time in my life when I just do not want to move no matter what.
Mostly I am posting this to see if the graph will post, after seeing the pretty graph posted by davebarnes above.
So pretty simple explanation. Nearly everyone finances their house. Because of that the cost of money affects house prices and how many are built. Notice sudden spikes or dips in the interest rate affecting starts. In regards to the current market interest rates have been very low for a very long time while starts have been low comparatively. That means inflation in existing inventory.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Home prices in America are increasing at double the rate of a 'normal' housing market
