The chart below appeared recently in The Economist along with an article describing a new prediction model that they’re trying out (you’ll have to have a paid subscription to see the article). They point out that globally, in most countries, homes have made back most of their losses sustained in the Great Recession. That’s true of the U.S.
Nor are they predicting a major correction during the next year or so. Their conclusion: “The most likely scenario is that the rally has room left to run.”
Here’s the news locally in San Francisco according to our latest market report (text or email me for a complete copy): “High stock markets, low interest rates, surging luxury home sales, limited inventory, a spring full of unicorn IPOs, and San Francisco – once again – hits new highs in median home sales prices.” The median house sales price was $1.7 million in Q2 2019.
At the same time rates of appreciation have stuttered a bit in recent quarters. Whether this is because we are reaching a “top” or whether these backward-looking statistics are simply reflecting the hangover from the stock market turmoil that occurred in Fall 2018 is anyone’s guess. Stay tuned.