Home Sales: Is Another Bubble Forming?

Home Sales: Good Market Or Another Bubble?

Home sales and home values continue to rise. Many people are wondering if we are seeing another housing bubble.

After the previous bubble and crash, many people are concerned that we could see the same thing happen again. So, is that the case?

home sales


As of now, the answer is no.

Home sales continue to increase, and prices and pending sales are also on the increase.

Buyer demand is very strong, which is part of the reason home prices continue to rise.

The other aspect of rising prices is the lack of inventory. Supply is not keeping up with demand, so naturally prices are increasing.

However, there is a big difference between this market and the real estate bubble a few years back.

Prices rose dramatically during the boom, and that is not something that can be maintained for too long.

At some point the market will correct itself, and when it shifted dramatically in one way, it had to shift back just as dramatically–and that is what lead to the crash.

home sales


This market has already shown signs of correcting itself.

That can be seen in the appreciation rate throughout 2014 and so far into 2015.

2014 saw double digit appreciation rates. However, as 2014 unfolded, the market saw appreciation rates slow down.

The historical norm for appreciation has been in the 3%-4% range, and appreciation rates were approaching that level.

The last couple months have seen appreciation rates accelerate, and a lot of that can be attributed to the lack of inventory.

This is something to keep an eye on.


home sales


If inventory continues to lag behind demand, prices will continue to be pushed upward. This could lead to a bubble. 

However, there are good signs on the horizon that will keep that from happening.

Builders have seen the demand and are responding by building new homes to help meet the demand.

With prices continuing to go up, many sellers will be coming off the fence and listing.

There are still some home owners that are in a negative equity position, but those numbers are declining.

home sales


More and more home owners have regained equity, and many more have regained enough equity that they are able to sell now.

There are plenty of good signs in the real estate market.

Home sales have taken off so far in 2015, well before the traditional buying season of Spring and Summer.

In fact, as of right home sales now we are on an annualized pace of over 5 million homes for 2015.

Home sales are up for every price range over last year, except for homes under $100,000.

However, that is made up mostly of distressed sales, such as foreclosures and short sales, and the number of distressed sales continues to drop. home sales

Pending Sales continue to increase as well.

In fact, every month since February has seen the most Pending Sales since June of 2013.

Foot Traffic, a measure of people actually out looking at houses also home sales continued to rise.

These numbers are good indicators of future sales, so it looks as though we will continue to see sales numbers increase over the year.

In fact, 2015 is on pace to be the best year in almost a decade.

Inventory continues to be the issue. But things are starting to head in the right direction.

For the first time this year, the year-over-year inventory numbers are up.

home sales

If inventory increases enough to meet the demand, then that will help strengthen and stabilize the market.

Industry experts anticipate more listings hitting the market due to the Summer selling season and the fact that increasing prices will motivate more home owners to sell.

You also have to factor in that the market is very favorable to buyers thanks to interest rates remaining near their historic lows.

Many home owners realize the opportunity that exists to move into their next home–but they have one to sell first.

So, what we are experiencing is a not another bubble forming.

This is a healthy sellers market. It will be important to continue to keep an eye on inventory levels and home appreciation rates.

If you are thinking about buying or selling in the Charleston SC area, then bee sure to visit my Pam Marshall Realtor website.

If you want to keep up with the latest home sales numbers for Charleston, then visit my Charleston SC real estate stats page.










Leave a Reply

Your email address will not be published.