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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).

Are Home Prices Approaching Bubble Territory? | Keeping Current Matters

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).

Are Home Prices Approaching Bubble Territory? | Keeping Current Matters

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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3 replies
  1. Robert
    Robert says:

    This report is ridiculous ! You can’t have housing prices and other goods keep rising without an increase in wages. A bubble is also based on the strength of an economy. With a fiat money currency the home values keep rising do to inflation or the amount of money in circulation. The global bankers control the markets, they approve home values and allow prices to rise. This brings them bigger profits and takes excess money out of circulation. Values are going up because the currency is weak.

  2. Dwayne
    Dwayne says:

    The US wage earner hasn’t seen a wage increase since 1999. In fact it has gone done even further with the skyrocketing cost of health care. Homes over 2ook in the Okc metro haven’t increased a dime since 2010. Over 300k are now decreasing. Repo’s in the over 500k range are skyrocketing in the all of the areas of the OKC metro.


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