Home Prices Are Still Shooting Up, but Is This a Bubble About To Burst?
The nation's surging home prices don't seem to care about the recession the country is mired in. They can't be bothered by the deadly coronavirus pandemic or the double-digit unemployment that's come as a result. Instead, prices are defying logic, expectations, and even belief, as they shoot up to record highs amid an unprecedented health and economic crisis.
It has all led some to wonder: Are some markets getting too hot? Could a significant correction be around the corner?
Such questions have become louder in recent weeks, in the face of some startling growth numbers, particularly in some high-priced California and less expensive Rust Belt, Midwestern, and Southern markets.
In some of these metropolitan areas, prices have shot up by more than 20% in the past year alone. Just how sustainable is this seemingly irrational home price exuberance, anyway? Could we be entering the dreaded bubble territory once again?
Nationally, the median home list price rose 10.1% year over year in the week ending Aug. 15, according to the most recent realtor.com® figures. No one predicted such a dramatic increase compared with 2019—when the economy was strong, no one had heard of COVID-19 and social unrest hadn't exploded.
In fact, many experts predicted prices would flatten, if not fall.
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