Yeah interest rates are on the rise and house flipping shows are all the rage. Come join the investors in real estate and get rich. Quick, before the whole thing implodes… or at least that is what some nay-sayers claim. Most likely, a slowdown in the housing market will most likely manifest as a plateauing of prices instead of a “crash”. Now that, of course, is in general: condos, commercial real estate, and select areas could all experience a reversal, but we’re talking in general here. Usually the places where a reversal would occur is where the pricing has gotten out of control and grown to quickly. Take these areas for instance:
Metro Housing Increase (vs last year)
Phoenix 47.0%
Cape Coral, Fla. 45.2%
Palm Bay, Fla. 40.0%
Orlando 36.5%
Sarasota, Fla. 34.3%
Reno 32.1%
Miami 31.7%
Deltona-Daytona Beach-Ormond Beach, Fla. 31.2%
Durham, N.C. 30.9%
Sources: National Association of Realtors, Commerce Department
Imagine a 47% increase in one year! If you had bought a small hovel in Phoenix for $200,000 last year it would be worth $294,000 today. Nice. But what really grabbed my attention on this article was not so much the “bubble” as it was the huge difference in pricing around the country. The NATIONAL median price of a home was $212,000 in September (up 13.4% from a year ago – but down from $220,000 in August). Some areas are tad higher though:
Metro Housing Median Prices (September):
San Francisco $726,900
Anaheim, Calif. $696,100
San Diego $605,600
Honolulu $577,800
White Plains, N.Y. $506,800
Bridgeport, Conn. $487,300
Los Angeles $474,800
Nassau, N.Y. $467,700
Long Island, N.Y. $452,700
Washington DC $429,200
Sources: National Association of Realtors, Commerce Department
Why do I feel like yelling “sucker!”?…