Lets look at future prices over the next three to six months. We know that by the end of the next year we are going to start seeing appreciation and we are going to slowly build to appreciation over the years after that. By 2016 we are going to be pretty much back to normal levels of appreciation which is about 3.5 percent a year; so actually 3.6 percent per year. Lets look at the next couple of months because I think sellers think that because prices are going up that they will be going to go up 10,15,20 percent in the next year. When in reality we are probably going to see some softening before we see any prices going back up.
Here is a direct quote from RPX Market Report:
I’m not trying to poor out bad news here! We have two sides of the transaction remember. If prices go up, that’s good news to a seller bad news to a buyer. If prices go down, that is bad news to a seller and good news to a buyer. So I don’t think there is a such thing as good news or bad news. What RPX is saying is that the gains we made in the first half of the year we might give back in the second half of the year. So we have to be able to tell our sellers that that is a possibility. As a matter of fact we could argue it might even be a probability. Even Lawrence Yun, the chief economist at NAR says this:
Because there are less distressed properties and the median price is what half the houses sell above that number, and half the houses sell below that number. As there are less distressed properties selling that median bar rises. That doesn’t mean that houses sell for more money necessarily. But all of the home prices measures now are showing positive movement and that is building confidence in the market. So even NAR has said that part of the reason for the increase in prices is that in fact there are less foreclosures coming out. And fewer sales in the lower price ranges.
Thanks KCM Crew