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REPORT:
DESPITE GAINS,
NATIONAL PRICE
PEAK FAR OFF
As home prices continue to soar year-over-
year and commentators draw lines to histori-
cal averages, Clear Capital offers one piece of
advice to all those expecting to see a national
peak anytime soon: Don't hold your breath.
In its latest Home Data Index Market
Report, the company says the market won't
reach peak prices again until 2021 at its cur-
rent rate of growth.
"National home prices are right in line
(within 2 percent) with inflation-adjusted
long-run average levels, indicating prices have
normalized post-bubble and future rates of
growth will look more like historical rates of
growth," Clear Capital said in its report.
By the company's data, inflation-adjusted
home prices at the metro level show 46 out of
50 metro markets' home prices are at pre-2003
levels, with half reporting prices below 2000
levels. In fact, Honolulu is the only market
in the top 50 to see home prices within peak
levels, partly due to its "unique supply and
demand" situation.
With so many markets still so far down
from peak prices, "it's time for conversations
surrounding price trends to shift away from
the 2006 peak as the point of reference,"
said Dr. Alex Villacorta, VP of research and
analytics at Clear Capital.
"For new deals and investors without
legacy assets, the new housing environment
should be framed in terms of more typical,
moderate rates of growth with tempered
optimism for the ongoing housing recovery,"
Villacorta said.
e good news in all this, Clear Capital
said, is that even with prices trending up, "we
don't see evidence of a price bubble forming
again"—at least not in most markets.
"Double-digit gains over the last year,
while similar to rates of growth in the run-up
to the bubble, are off a much lower price
floor," Villacorta observed.
