It’s hard to believe that it’s been over 6 years since the real estate market started it’s downward spiral that helped contribute to one of the worst economic downturns in U.S. history.
If you’ve been in your home that long, then you may have cringed like I did as you watched your equity and value plummet while homes were foreclosed and short sold all around you. Many lost their homes and much of their equity. Some have still not recovered. Hopefully you’ve landed on your feet by now and maybe even begin to build equity again.
The good news is that real estate turned the corner in 2013 and saw it’s strongest gains in the last 6 years.
Prices started perking up back in mid 2012 and shot up dramatically in January of 2013. Since then, it’s been month after month of increasing volume and price.
A look at the 1st chart shows that in the last 24 months, the median price of sold homes has risen from $240,000 to $336,000. That’s a 40% increase and most of that has happened in the last 15 months since about July of 2012.
The 2nd chart on the right shows that available homes for sale has steadily decreased over an 18 month period to nearly half of what it was near the peak.
This simple illustration of supply and demand really shows the increase in buyer activity that has helped bring the real estate market back
What can we expect in 2014? Likely the return of a more normal market with more normal appreciation somewhere in the neighborhood of 5-8%. The days of 25-30% appreciation are probably over… and that’s a good thing for the health and longevity of the market. -JB
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