The economists at CoreLogic recently released a special report entitled, Evaluating the Housing Market Since the Great Recession. The goal of the report was to look at economic recovery since the Great Recession of December 2007 through June 2009.
One of the key indicators used in the report to determine the health of the housing market was home price appreciation. CoreLogic focused on appreciation from December 2012 to December 2017 to show how prices over the last five years have fared.
Frank Nothaft, Chief Economist at CoreLogic, commented on the importance of breaking out the data by state,
“Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011. After finally reaching bottom in 2011, home prices began a slow rise back to where we are now.
Greater demand and lower supply – as well as booming job markets – have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”
The map below was created to show the 5-year appreciation from December 2012 – December 2017 by state.
Nationally, the cumulative appreciation over the five-year period was 37.4%, with a high of 66% in Nevada, and a modest increase of 5% in Connecticut.
Where were prices expected to go?
Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts, and investment and market strategists and asks them to project how residential home prices will appreciate over the next five years for their Home Price Expectation Survey (HPES).
According to the December 2012 survey results, national homes prices were projected to increase cumulatively by 23.1% by December 2017. The bulls of the group predicted home prices to rise by 33.6%, while the more cautious bears predicted an appreciation of 11.2%.
Where are prices headed in the next 5 years?
Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%.
Roseville Home Prices Over the Past Five Years
Roseville home prices have seen significant increases over the past five years. Median (or middle) price is a foundation number we utilize often in real estate to have a marker for comparison. I put the arrow in to indicate where the Roseville median home price has gone from February 2013 to February 2018 without the fluctuations in between. Basically $350,000 to $460,000.
There is only one place after February of 2013 where the Roseville home prices dipped below that $350,000 median: March of 2013 must have scared some recent homeowners when they saw the median fall to $325,000.
October of 2014 and February of 2015 saw dips back to $350,000 but not below.
This image is the perfect example of why real estate is generally a long-term hold proposition. Whenever someone asks me if they should buy a house, the first question is: How long are you going to own it? Besides the insanity of the Bay Area real estate market, it takes time for a market to grow and give a homeowner an increase in equity. Typically, anything less than five years isn’t enough time to get the increase in equity you need to pay the costs of purchasing and holding the property.
Apparently if you prefer the numbers version of the data you’re really a geek. I think it’s easier to read.
For Roseville home prices, the average sold price February 2013 through February 2018 has been an increase of 34%
Ryan Lundquist at Sacramento Appraisal Blog has a couple of good explanations as to why you can’t accurately price houses by square footage. One references a Lamborghini which makes the topic a little more interesting. Check it out.
I’m referencing square footage here only to show the increase, not as a comparison between houses. Hopefully Ryan will let me get away with that; otherwise, it’s not a good measurement of value.
Sold/Orig LP Diff. % – Ok, that means the Difference in Percentage of the Sold Roseville home Price vs The Original List Price. So houses were selling for just about the asking price. No big over the asking price sales or bargain basement pricing.
Avg Days on Market – Are the average days it took for a house to sell. This high was 46 days in February of 2015. As of last month, we’re back to what it was in February 2013.
Factors Contributing to the Increase in Roseville Home Prices
Roseville population increased 10% between 2010 and 2016
Bay Area Exodus
The number of people leaving the Bay Area has caused a shortage of moving trucks.
Efforts to move out of the Bay Area continued in recent months, with 16,000 residents packing up and taking to the road for cheaper housing and new opportunities. A study by real estate brokerage Redfin found the Bay Area remains the top region for outward migration in the country.
1. Housing is much more affordable.
2. It’s a wonderful place to work.
3. They can still access the Bay Area.
4. Sacramento’s culinary scene is on the rise.
5. Sacramento is more laid-back.
6. It is closer to nature. (I would say close, not closer but…)
7. It has an even more central location.
8. There is less traffic. (For now.)
I talked to a Redwood City resident the other day. She said, “What’s the but?” So I said, “What’s the but??” There’s always a but, she told me. It all sounds so good but there’s always a “but.” What is it? It’s hot. That’s my answer. I’ve been here seven months. The only “buts” are that it’s hot and people drive like they’re going to an emergency. When I first got here some smarty pants told me it only looks like that to me because I’m used to sitting in traffic all the time. Well, I have to admit that I drive like everybody else around here now. When I go to the Bay Area, I wonder WTH?!
Bottom Line: Is it a good time to sell?
Could be. It depends. Call me and let’s talk about your specific situation.