At the beginning of the new year and new decade, it’s worth reflecting on the past year and past decade in the housing market.
We’ve spent more than 10 years recovering from the housing bubble that burst in 2006. That was the peak of the market when 20% annual price increases came to a halt.
Consider that the median price for a home in 2002 in Anne Arundel County was $189,000!
By 2006, at the peak of the market it was $344,100! That’s an 82% increase in 4 years!
The market hit bottom in 2011 with the median price down to $280,000—a 22% drop in prices.
To put things in perspective, it was not until this year that the median price for houses exceeded the median price of homes at the peak in 2006 (355,000 in 2019).
Think about that, it has taken 13 years to get back to where we were with housing prices in 2006!
Let’s turn to more recent times. We’ve seen appreciation approaching 4.0% annually since 2016 and almost a 4.5% in prices in 2019. Considering that inflation (CPI) has barely exceeded 2.0% during that same time, homeowners have benefitted nicely. So, it’s a good time to sell, if you are considering doing so and the horizon for buyer’s continues to look good from a personal wealth standpoint as well.
Given the continuing relatively constrained housing inventory, housing prices are likely to outstrip inflation for some time, though fortunately any return to the excesses of the early 2000’s seems extremely unlikely at this point.