Our current market is not overpriced, and there are a few reasons why.
I talk to a lot of intelligent people who realize that house prices have risen dramatically over the last few years, and they’re scared to get into the market. I can understand that fear; they’re worried that today’s market is overpriced. Is our market really overpriced?
The truth is that real estate has peaks and valleys, just like any other commodity. It always has and always will. If you remember what the market was like between 2007 and 2012, you know that many people saw as high as 50% drops in their home value during that time. It was a full-blown real estate depression. There’s a lot of ground to be made up from that depression as far as prices go.
According to the U.S. Bureau of Labor Statistics, housing prices are up 610% today versus where they were in 1970. Housing has experienced an inflationary rate of 4.17% per year versus the overall U.S. inflationary rate of 3.97%.
“Real estate has peaks and valleys. It always has, and it always will.”
In other words, a house that cost $100,000 in 1970 would cost $710,000 now. If you apply that 4.17% per year since 1970, we would be almost exactly where we are now in terms of house prices.
You have to consider that every neighborhood is different. Last year, Snohomish County ended at an average price of $749,000, Skagit County ended at $623,000, and Camano ended at $887,000. When you factor in inflationary adjustments, our market doesn’t look overpriced anymore.
In 2022, I think we’ll see the most normal spring market we’ve seen in the last few years, and there is no downturn on the horizon. Maybe now is the best time to get into the market. If you have questions or if there’s any way we can help, don’t hesitate to call, text, or email us. We would love to talk to you.
