Are we nearing the end of those sky-rocketing real estate prices? The typical home in America has appreciated 55 percent since 2000. But many areas of the country saw even more dramatic appreciation than that. Now, there’s strong evidence that the record pace is starting to slow. Has the housing bubble has sprung a leak?
Nancy and Phil Marrone spent today cautiously going over new home listings, and doing a few walk-throughs in Northern New Jersey.
They’re worried they’re buying just as the market turns south.
“You may invest in something that you like and then all of a sudden you can’t sell it for anywhere near what you paid for it,” says Phil Marrone. “It is a little scary.”
Real estate experts say that’s unlikely, but that there is a general slowing in housing across the nation.
“The boom has peaked and it’s starting to come down,” says economist David Lereah of the National Association of Realtors. Lereah says the bubble hasn’t burst, but already, prices aren’t going up as they did a year ago.
The average home in Las Vegas went from an annual appreciation of 54 percent in 2004, to 11 percent appreciation through the third quarter of this year.
San Diego slowed from 33 percent appreciation to 6 percent.
Still, New York, Tampa, and Washington D.C. showed no appreciation slowdown.
On average, home prices nationwide are expected to have risen 13 percent this year. But the fourth quarter numbers aren’t in yet and there’s considerable anecdotal evidence of a slowdown. The question is, how much of that is a normal seasonal pattern?
New Jersey real estate agent Richard Nicola says sellers can no longer expect multiple offers and 20 percent annual appreciation.
“Homeowners now really need to price their homes properly,” says Nicola: like a 5 percent annual appreciation.
Today in Sarasota, Joanie Alexander was putting her home up for sale, but fears there’s now a glut of homes on the market.
“I don’t know if this market has peaked or not, so I’m going to ask the price that I think the house is worth, for what I think it’s peaking at right now,” says Alexander. “But if I don’t get it in a couple of months, I will rent it.”
It’s a market in transition from sellers to buyers.