Despite being overvalued, there is no sign the housing market is in a bubble. (A bubble develops when there is speculation, or when buyers purchase homes with the sole intent of selling quickly for a profit, which isn’t happening today.) But stress lines are beginning to appear, and the housing market is set to cool off.

The increase in home prices is stunning. Nationwide, house prices are up double digits over the past year, and this comes after a decade of solid price gains since the housing market bottomed in the aftermath of the financial crisis. Indeed, the median existing home price — half of homes sold for more and half for less — is closing in on $350,000, almost double what it was a decade ago.
Think about the return you would have earned if you had the gumption to buy the median-priced home at the bottom of the market after the financial crisis, say with a typical 20% down payment. It comes to an approximately 560%…

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