VAR: CNN doesn't understand the concept of a bubble


VAR: CNN doesn't understand the concept of a bubble
By Scott Rogers • October 22, 2012
From the fine folks at the Virginia Association of Realtors.... "Home prices may not return to peak until 2023," is the CNN Money headline. The story is that housing prices may take that long to hit their 2007 levels — that is, the levels they were at the peak of the housing bubble. This is news? During the bubble, property values prices rose way above rational levels, and thus way above where they should have been. ("Should have," being defined as where they would go if they stuck to normal levels of inflation.) It's as if CNN was expecting prices to look like this: When in reality they're going to look like this: You can't expect prices to hit 2007 levels any time soon. Home prices have, on average, tracked inflation. After the bubble burst, prices dropped below where they should have been (think of it as the pendulum swinging far in the other direction), and are making their way back to their "natural" state. At which point they'll proceed to track inflation, barring another bubble or bust. So if, like CNN, you were expecting the market to quickly make its way back to 2007 levels, think again. And give it time. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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