Weekly Special | July 16, 2017

Home Values Are Rising Fast

If you purchased a home from late 2005 through late 2009, it is highly likely that your home is not (yet) worth what you paid for it.

The graph above uses all existing single family detached home sales recorded in Leon County, Florida and computes the average price per square foot each month.

With 27 years of resale data showing average home values over time, it is easy to see when the market got ahead of itself and also when it recovered.

The yellow line plots the course that home values were following in the 1990s and it is clear that appreciation went crazy from 2003 to 2008. In fact, it shows that home values more than doubled from 2000 to 2008, and this is why the past ten years has seen home values struggle to get back on track.

But it does appear that values are back to “normal,” a level where they would have reached had there not been a housing market bubble and subsequent crash.

Home Values Are Heading Higher Based upon the fact that demand has returned and there is a limited supply of homes for sale, we are going to see more new construction in the next ten years than we have in the recent ten.

Construction costs have continued to rise, thus we are going to see new homes bringing growth in appreciation to the resale market. Home values will rise to new heights in the next five years, perhaps even within the next two years.

This issue went with a longer report on our blog: read the full blog post. The original one-page Weekly Special PDF is still available.