Home prices have been soaring by double digits compared to last year’s numbers and the National Association of REALTORS® are calling the rises “unsustainable.”
The price for existing home sales surged 15.4 percent higher in May compared to last year.
A correction in the market explains some of the increases, but with people's income rising at only 1 or 2 percent and prices rising in double digits, the question on some people's lips is can it continue?
Discounts for bank-owned homes are disappearing rapidly, particularly in markets like California, Arizona, and Florida, and prices are rising faster than traditional home prices.
It could be assumed that part of the dramatic increase in median home prices can be attributed to the foreclosure discount evaporating, suggesting that overall home price increases may be overstated.
However, according to NAR’s latest report, more expensive homes are seeing higher price rises. For example, homes priced at more than $500,000 have had prices increase by 33 percent in the last year while homes priced below $100,000 have had prices down 9 percent year-over-year.
Source: “Home Price Rise ‘Unsustainable,’ Realtors Report Says,” CNBC (June 20, 2013)
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