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Is the current surge in home sales a (dangerous) repeat of the past? |
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![]() 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. Recent Articles:
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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