Is the current surge in home sales a (dangerous) repeat of the past?


Is the current surge in home sales a (dangerous) repeat of the past?
By Scott Rogers • December 29, 2016
We saw a surge in home sales back in 2003-2005 (and beyond) with a 26% increase in the pace of sales in a two year period. Let's see how that compares to more recent years.... As shown above, if we finish out 2016 with 1300 home sales (which seems likely) we will have seen a (somewhat) similar surge in home sales with a 20% increase over a two year period. Hmmmm --- should we be worried? After the real estate boom of the early 2000's, we saw a significant bust. Let's look further.... As shown above, between 2003 and 2005, home prices were increasing RAPIDLY -- with a 33% increase in a two year period. This, it turned out (surprise, surprise) was NOT sustainable. Family income was not increasing by 33% in that same two year period, so families (and individuals) were spending a greater and greater share of their income on housing. This rapid increase in prices was a large contributing factor to why prices (and the pace of sales) then started to decline in 2007 +/-. So, are we seeing that same rapid run up in prices? And --- no! Which is GOOD news! We have only seen a 8% increase in the median sales price over the past two years, which I believe means that the recent increase in the pace of sales is not an indicator that this is a boom that will be followed by a bust. What's your take on this data? Email me at scott@HarrisonburgHousingToday.com with your thoughts or questions. Receive Updates by Email Recent Articles: How Much Should I Consider Spending To Renovate My Home? The Increasingly Difficult Challenge Of Purchasing A Detached City Home 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
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 27, 2024 (unless otherwise noted).
Comments (0) or Subscribe