The short answer is, “we still have a little way to go.” If you look at average price per square foot, Glendale single family homes are at $404/sf. We last saw that value in early spring of 2005. Our peak price per square foot was $460, in the middle of 2006. We have approximately 12% more to go before we “recover” our value.
Translation- home values are good, and there is room to get better.
What is holding us back?
One would think that low inventory and high demand would drive prices into the stratosphere. However, low inventory is exactly what is keeping prices in check. The last time inventory was low relative to demand the banks were practically printing money. Anyone who could fog a mirror got a loan and any house that had a roof would appraisal at sales price. This time the banks, and the buyers, are more cautious.
Buyers, banks and appraisers are willing to go a little over the last closed sales, but not a huge leap. Since there are so few homes available, the pace of sales is slow, and it takes longer to inch those value forward.
Arguably this is a far healthier and sustainable way to grow the equity in our homes.
Is this is a great time to sell? Yes- but I don’t think you need to rush to get on the market.
Is this a great time to buy? YES. Interest rates have got to rise at some point, and most expect sooner rather than later. This relatively steady pace of price appreciation means we are unlikely to see a crash- this means the longer you wait the more expensive that house will be.