Some say prices are going up 20 percent, while others say prices are going to fall because of interest rates. What’s really happening? According to the Home Price Expectation Survey, which is a group of over 100 economists, real estate experts and investment/market strategists, say there is no indication that the market is heading towards another bubble with huge gains in home appreciation. What they do say is that we are heading back to normal appreciation levels. Even though we have seen significant increases in appreciation recently, this is merely a catch up period to get us back to where we were prior to the bubble. As the chart above reflects, prior to the bubble and burst of the housing market, we were at 3.6 percent appreciation. When the bubble hit we were double that amount. Today we are at 4.3 percent back from the bottom and they are projecting going forward over the next several years is that the annual appreciation is going to be around 4.1 percent… no where near the appreciation levels that destroyed the market.
Dan Elsea, President of Real Estate One, also shares insights regarding the market here in Oakland County and he is of the same opinion that the market is returning to normal, which is a good thing. To hear his market update in full click here.
If you would like to learn more about what’s happening in your market, give me a call.