What Happened To Real Estate Prices in 2015?

What Happened To Real Estate Prices in 2015? OurBroker.comReal estate values increased substantially in 2015 but did they increase enough?

“The median sales price of U.S. single family homes and condos in October was $207,500, up 1 percent from the previous month and up 10 percent from a year ago — the highest year-over-year percentage increase since February 2014,” according to RealtyTrac, the big housing data specialist.

RealtyTrac adds that “the 10 percent increase in October 2015 came following 20 consecutive months of single-digit annual increases in median home sales prices and marked the 44th consecutive month with a year-over-year increase in median home prices. Despite nearly four years of increases, the U.S. median sales price in October was still 9 percent below the previous peak of $228,000 in July 2005.”

The National Association of Realtors said “the median existing-home price for all housing types in October was $219,600, which is 5.8 percent above October 2014 ($207,500). October’s price increase marks the 44th consecutive month of year-over-year gains.” NAR’s quarterly metro-area report showed that for the third quarter year-over-year home prices rose in 154 out of 178 metropolitan statistical areas but fell in 24.

Lastly, “from August 2014 to August 2015, house prices were up 5.5 percent,” said the Federal Housing Finance Agency. “The U.S. index is 0.9 percent below its March 2007 peak and is roughly the same as the December 2006 index level.”

The leading price indexes all show that home values in 2015 not only rose but that they increased at a good clip. That said, it’s obvious that the increases are not universal, that some areas are doing better than others, that some areas are actually in decline, and – most importantly – that we still do not have the peak prices which we saw before the mortgage meltdown.

Real Estate Normality

What we’re really looking at is a housing market which is better than it’s been in many years but not better than it used to be. We’re making progress but we have not even caught up with the pricing seen years ago.

For millions of Americans rising home values have diminished the specter of foreclosure because of the vast equity increases that we have seen in recent years. According to the Federal Reserve the value of American homes has increased $6.5 trillion since 2010. In basic terms, more equity is the best protection that homeowners have against foreclosure because in the event of tough times they can always sell the property and generate enough money from the sale to pay off any mortgage debt in full and preserve their credit standing.

The bottom line is that 2015 is shaping up to be a very good year on the march back to real estate normality, but we have much, much more to go.

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