If you have been paying attention to the real estate market for the past few years, things have been improving. 2016 was no exception as we saw more sales and the median sales price continue to increase. I get a sense of confidence when speaking with people about the real estate market.
Let's take a look at the past 14 years.
Number of Houses Sold
In terms of sales volume, the peak of the bubble was 2005. We haven't quite recovered from the peak in terms of volume, however, we are still seeing steady growth. There may have been more sales this year had there been more homes for sale. That being said, we saw 14% more sales this year than last year.
The demand for housing in '03-'05 caused prices to sky rocket. I think it is important to see that while we are seeing an increase of demand for housing, prices aren't increasing at the speed they were prior to the crash.
Median Sales Price
As we can see in the graph above, the price of housing sky rocketed from 2003 to 2006. In those four years, the price went up a staggering 44%. In contrast, the median sales price has gone up 9% in the past 4 years. This all indicates more healthy market growth.
The median sales price in 2016 was only $2,600 shy of the highest median sales price in 2007. If the current market trends continue, the median sales price should surpass 2007 in 2017. Furthermore, the median sales price could even surpass $200,000.
I talk with a lot of people who purchased homes at the peak of the bubble. In Harrisonburg/Rockingham, the peak of the market, in terms of median sales price was in 2007. At the start of the year, I did a comparison of how close 2015 was to being fully recovered from the bubble bursting. Since then, sales have been hot. The lack of inventory and the surplus of buyers have helped create higher median sales prices. So where do we stand now?
2016 Median Sales Price Compared to The Peak and Bottom of The Bubble
As we can see, so far in 2016, the median sales price has almost matched that of 2007. In fact, we are only 1% under the median sales price of 2007. We'll need to see how sales continue for the rest of the year to get a comprehensive analysis. I will be sure to do a more in depth analysis at the end of the year.