Interesting and timely topic as people balance the risk of buying a house against the risk of another “BUBBLE COLLAPSE”, like we hit after 2007.
Looking at the actual statistics gives a more calming picture. For example, in Delaware County, prices of single family houses peaked at an average price of $273,000 in 2007. And they never did decline a whole heckuva lot after that. Lowest year was 2012 at $257,000 or a 9.4% decline.
Surprisingly, we are at about that same level in 2015 and 2016 so far at $259,000. That 9.4% drop is no fun if you are selling a house that once was worth $500,000 (about $37,000) but it is not jump off the highest building territory.
Chester county was similar. Peaked at an average of $392,000 in 2007. Lowest year after that was also 2012 at $341,000, a drop of 13.1%. Again, no fun if you sold back then, but no need to panic either. Now back up to about $370,000 in 2015 and so far in 2016. Still about 6% below the peak.
What is the message? Lots of states really got clobbered and are still there. See Florida and Arizona still at -18%; Nevada at -26%.
And interestingly enough, the middle part of the country is all up from 2007, anywhere from 6% in Wyoming to 47% in North Dakota. Strong correlation to states where the government tends to leave the private sector more alone than in other parts of the country.
This housing market has many people talking about home values; where they are and where they are headed. It’s also interesting to look back and see how home prices compare to values prior to the housing crisis.
Every quarter, Freddie Mac releases their House Price Index. The index usually provides monthly home values for:
- the nation as a whole
- each of the 50 states
- 367 metropolitan statistical areas
This quarter, the report also included a look at today’s home values as compared to Pre-2008 values. Here is a graphic that breaks down the numbers on a state-by-state basis:
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