“Normal is nothing more than a cycle on a washing machine.”- Whoopi Goldberg
What is normal? A tremendous question when it comes to the housing market. The latest forecast from Fiserv Case-Shiller predicts home prices are returning to prices out of the extremes.
“2012 was the first year since 1997 that the housing market has resembled something [close to] normal,” said David Stiff, Fiserv’s chief economist. “For the past 15 years, home price changes and sales volumes have either been boosted by a bubble mentality or crushed by crash psychology.”
From late 2011 to now the market has begun to stabilize. Average U.S. home prices rose 3.6% between September 2011 and September 201,. By then, 62% of the 384 metro areas Fiserv tracks reported rising home prices, up from just 12.5% of all markets during the same period a year earlier.
The similarities to 1997 in the housing market stops at the prices. There are many foreclosures, but luckily low mortgage rates as well. The housing market should have an overall positive impact on the economy, especially in Minnesota where the housing market is already stronger than other areas. According to the Minnesota Housing Report, the median sales price for the entire state was up 13.6 percent in January 2013 from the same time last year to $142,000. In 2012 the median price was $125,000.
So what is normal? There will never be a strict definition of normal, but we are seeing a return from the extremes.