National home prices see biggest leap in 7 years
Supply and demand, when demand is high and supply is low, prices will go up, right? It’s the oldest economic principle in the book and we’re seeing it happen in the housing market across the country. National housing reports for April show that home prices saw their biggest leap in 7-years! According to housing reports, prices were up in 48 states when looking at year-to-year numbers for April. Across the country, housing values were up just over 12-percent in April of 2013 compared to April of 2012. Here, the Minnesota housing market shows steady price increases over the same stretch in time. Our homes didn’t appreciate at the same clip – nearly seven and a half percent year to year – but that may be a good thing.
There are a number of factors for this and according to Chris Galler, CEO of Minnesota Association of REALTORS, large appreciation in numbers are not always good. Galler points out that some of the states that saw the highest appreciation year to year are states that have had more distressed properties.
According to a report by the Associated Press:
“Nevada led the states with prices that jumped 24.6 percent from a year earlier. California’s gain was next at 19.4 percent, followed by Arizon’as 17.3 percent, Hawaii’s 17 percent and Oregon’s 15.5 percent.”
“Our appreciation figures are a bit lower because we do not have the distressed sales that Nevada and California have. We’re returning to a more natural market place,” said Galler. He also points out that “historically, residential real estate appreciates just a point or two above inflation. Consistently, higher appreciation rates lead to market bubbles,” pointing to 2007, 1982 and 1978 as examples of this.
Here in Minnesota, housing reports show consistent price increases statewide for over a year now and many of the highest appreciating states in this recent national report have not. Still, Minnesota’s housing market is strong and steady with a high home ownership rate compared to other states.
“Minnesota has always had a strong home ownership rate,” Galler said, pointing to it’s usual ranking of either #1 or #2 nationally.
The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.