Are Home Prices Approaching Bubble Territory?

    Are Home Prices Approaching Bubble Territory?  As home values continue to rise, some are questioning whether we are approaching another housing bubble. Zillow just 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.”  Though that statement is correct, we must realize that just catching 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).

    As home values continue to rise, some are questioning whether we are approaching another housing bubble. Zillow just 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.”

    Though that statement is correct, we must realize that just catching 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).

    We can see that prices rose during the early 2000s, fell during the crash and have risen since 2013.

    However, let’s assume there was no housing bubble and 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).

    Bottom Line

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

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    Jordan Forney

    Jordan is a recent graduate of Lenoir-Rhyne University where he received his BA in Multimedia Communications while also playing football all four years that he was enrolled. Jordan has experience in writing and photography from his time working for the school newspaper, Lenoir-Rhyne News (LRN). He also has marketing experience with WLRZ 99.3 where Jordan produced and aired PSAs and was in charge of marketing with the social media accounts. He was a part of the marketing team for the Lenoir Oiler's baseball team as well where he had a lot of the same responsibilities. Now Jordan works at Rinehart Realty where he is increasing his experience by posting blogs, maintaining social media accounts, and working directly under the Director of Marketing.

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