In April the median home value increased to $198,000 according to Zillow’s data. That is 1% above the peak of 2007 ($196,600). However, Zillow’s chief economist, Dr Svenja Gudell, thinks it is unlikely for us to have another housing bubble.
“We aren’t in a bubble, and won’t be entering one anytime soon. There are big differences between the market then and the market now: Then, loose credit, speculation and overbuilding were ingredients in a recipe for disaster. Now, healthy home buyer demand is being driven largely by a stable economy and demographic tailwinds, which is exactly what we would expect in a healthy market.”
Many experts, like Gudell, believe the market is in a good place. The demand for housing is simply outweighing the supply so much so that it is driving up prices. The highest growth in home value over the past year has been in Seattle, Tampa, and Dallas. Even if mortgage rates go up, most markets are still more affordable than they were prior to the bubble of 2007.
What are your thoughts on the currently housing market? Do you think we are building a bubble?