The Great Recession was one of the most challenging times in US history and in the Oakland County area. The US lost nearly 9 million jobs, unemployment nationwide hit an astounding 10%, and housing prices fell a whopping 33%, causing American households to lose of $16 trillion dollars in net worth also losing their homes value.
After the housing crisis of 2008, many homeowners found themselves “upside down” on their properties, with their mortgage balances significantly higher than their homes value. According to Zillow, negative equity in the US peaked 31.4% in Q1 of 2012, meaning nearly one-third of all mortgage holders in the US owed more on their homes than it was valued.
But luckily, the economy started improving in 2010. The GDP grew an impressive 19% from 2010 to 2017, and the economy added jobs for a record-breaking 88 consecutive months, recovering all the jobs lost during the recession. Not to mention, unemployment fell to 4%.
But one area that was a bit slower to recover was peoples home values. Many homeowners who lost a significant portion of their home’s value in the recession have been hesitant to sell—especially if they purchased their home when prices were high.
But according to Evaluating The Housing Market Since The Great Recession, a recent report from CoreLogic, homeowners who lost value in their homes during the recession finally have something to celebrate. According to the report, the average house price is now 1% higher than it was at the peak of the real estate market in 2006, growing 51% since bottoming out in 2008.
The Homes Value Takeaway
If you’ve been waiting to sell your home for it to recover its pre-recession value, now is the time to make a move. Not only have housing prices recovered to their peak values, but the inventory crisis is driving up prices, making it the perfect market to finally sell your home.
The Housing Confidence is at an all time high, this is great for home sellers that are looking to sell or downsize or cash in on their equity. With plenty of reasons to buy a home, but one of the main reasons is to build wealth. And if you own a home, chances are good that your wealth has gone up a few notches in the past year.
According to the most recent Home Price Index Report from CoreLogic, home prices nationwide increased by 7% from March 2017 to March 2018. According to an April 2017 article from the National Association of Realtors, the median home price in March 2017 was $236,400. This means the average homeowner has gained nearly $17,000 in wealth from their homes over the past year.
Housing Confidence Cause and Affect
The major increases in home values are due, in large part, to the national inventory shortage which is creating serious competition and driving up home prices. But this seller’s market can’t last forever, and most experts predict the increase in home values will slow in the upcoming year.
Feeling pretty confident in the housing market? You’re not alone.
Fannie Mae’s Home Purchase Sentiment Index (HPSI), which draws from their National Housing Survey data to assign a number to consumer’s home purchase sentiment, rose 3.4 points in April 2018 to 91.7—up 5 points from April 2017 and an all-time high for the survey.
The survey saw five out of six HPSI components rise in April, with an especially strong increase in people reporting that now is a good time to sell (up 6% from March). Other factors that play into consumer confidence in the housing market include the share of Americans who report not being concerned about losing their jobs (76%, an increase of 5% over March) and people reporting a significant higher household income over the previous year (18%, up 1% over March).
You’re not likely to find more confidence in the market then we’re experiencing at this moment in history. So if you’ve been thinking about making a move to buy or sell, now’s the time.
When you buy a house in Oakland County, you’re not just purchasing a place to live,you’re also making an investment in the real estate market. Which means, as your home’s value grows, so does your equity. Equity, of course, refers to the amount a property is worth minus the amount still owed on the mortgage. Put simply, if your equity is growing, that’s good news for Oakland County homeowners. Which is why new numbers from the Board of Governors of the Federal Reserve System are encouraging. That’s because they show homeowner equity on the rise. In fact, the total value of homeowner equity has increased $1.2 trillion over the past year and reached $14.4 trillion in the fourth quarter of last year.
In short, that means homeowners are seeing the value of their Oakland County homes, and their investment, grow. Whether you’re a current homeowner or are about to become one, this is a positive sign – as it indicates that the real estate market is strengthening and offering Americans a good opportunity to find a place they can, not only call home, but also a good financial decision. Read More Here
Prices and Equity Increase Across Oakland County
Thanks to historically low inventory and an extremely competitive market, home prices across Oakland County have been steadily rising in recent years. And according to expert predictions, it doesn’t look like that trend is going to change in 2018.
According to CoreLogic’s recent Home Price Insights report, home prices are expected to increase by 4.3% in 2018. While that’s less than the 2016-2017’s year-over-year change, which came in at 6.3%, it’s still a significant increase. If you purchased a home for $200,000 today, that same home is projected to cost you an additional $8,600 by the end of the year.
Homes have steadily been getting more expensive, and they’re just going to continue to get more expensive in the upcoming year. Buying at the start of 2018 can save you thousands (even tens of thousands) of dollars vs. waiting until the end of the year to make a purchase.