Capital Investment Advisors

What Are Housing Prices Doing In Your Neighborhood These Days?

If prices are moving steadily upward – and they probably are – you may be wondering if that’s a good thing or a bad thing.

With the housing bust of 2008 lingering in our minds, it’s easy to get unnerved by rising home prices. But let me allay your fears – we don’t seem to be in bubble territory just yet.

Instead, I believe that US Housing is still “mid-cycle” – meaning that we’re not in the early days of growth or the late days. It’s like being in the fourth or fifth inning in a baseball game.

There are a handful of indicators that support the mid-cycle label. First, as of this year, home prices nationwide are only at 10.9% above pre-crisis peaks. This number represents a mere 0.8% per annum gain since 2007. And, the top-ten cities are actually slightly below the 2006 peaks.

If we go back to 2000 – near the start of the housing boom – and look at overall gains, national home prices are up 3.7% per annum compared to 2.2% per annum inflation. So, we’re clocking in at just a smidge above regular old inflation. What’s more is that housing starts are well below prior peaks, and mortgage applications have been more modest post-crisis and (more recently) are benefitting from lower rates. These applications are still strong, but well below the level that was bubble territory in 2005 and 2006.

From all appearances and data, we have room to go higher.

The housing market began to form a bubble in 2000 and crescendo in 2007 – then prices crashed a whopping 30%. Much of the blame for that devastating turn of events goes to irresponsible mortgage lending practices that have since been addressed. (Mortgage applicants are much more thoroughly vetted than in the run-up to the crash.)

Since then the housing market has mostly recovered. Take a look at some of the growth and recovery we’ve seen in major cities:

  • Atlanta is 9% above the pre-crisis peak.
  • Denver and Dallas are up 54% and 49%, respectively, since the pre-crisis peak.
  • Phoenix, Tampa, and New York are down 18%, 10%, and 6%, respectively, since the pre-crisis peak, but all three are still significantly up since 2000. Phoenix is up 87%, Tampa is up 114%, and New York is up 102%.

Couple this information with the fact that, in six of the nation’s 100 largest housing markets, the median listing price has remained unchanged or dropped from 2017 levels, according to research from real-estate website Trulia. And, in another four markets, the median listing price has risen by less than 1% year-over-year.

Take a look at the data from Trulia in this chart:

Metro Area

Median Listing Price 1-year change in median listing price

San Antonio, Texas



Austin, Texas

$336,995 -3.4%
Honolulu, Hawaii $630,000


Camden, N.J.

$174,900 0%
Milwaukee, Wis. $229,900


Sacramento, Calif.



Houston, Texas $299,520


Dallas-Ft. Worth



Sarasota, Fla. $332,245


Denver, Colo. $453,990


For some of the markets where median listing prices decreased or stagnated, such as Honolulu or Sarasota, the change appears to be indicative of stabilization after a long bull run in these local housing markets, Trulia noted. The median listing price has risen 21% in Sarasota and nearly 18% in Honolulu since March 2015.

An index of housing prices in 20 major cities has shown annual growth of about 0.8% since 2008 and about 6% since 2012. Prices included in that index rose in the 3% to 4% range over the past year. All of the above seems to support the theory that we are in the middle of a slow, multi-year expansion in the housing sector.

I suspect many investors are worried about the housing market because they see a tumble in homes prices as a harbinger of recession. That’s an understandable concern. But as I’ve noted the complex nature of the economy makes it very difficult to predict a recession.

While we can’t accurately gauge the state and prospects of the entire economy, we can get a pretty good sense of what’s happening in discrete pieces of the economic pie. Right now, the housing slice of the American pie is still pretty tasty.

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