Real Estate Trends
Since the start of the 21st century, home prices have skyrocketed at a rate three times faster than incomes, pushing the dream of homeownership out of reach for many Americans.
In numerous major cities, the surge in home prices has eclipsed income growth. Take Miami, where incomes have seen a modest increase of 16 percent, but home prices have shot up by 58 percent since 1998. Similarly, in the suburbs of New York's Long Island, incomes have grown by only 14 percent, while home prices have soared by 81 percent. Boston's housing market tells a similar tale, with an 89 percent jump in home prices against a mere 22 percent rise in incomes.
Despite signs pointing to a potential downturn, the real estate market is on track for yet another banner year in terms of sales.
The luxury home segment is the first to exhibit a slowdown, with a spike in nationwide house auctions due to the highly customized nature of these expensive properties.
The silver lining in today's housing market is the persistently low interest rates, now averaging below 6 percent for 30-year fixed-rate mortgages — a figure not seen since the 1960s.
Experts in real estate analysis suggest that if the market does hit a slowdown, we'll likely see some regions continue to experience modest growth, while others may gradually soften, avoiding a sudden burst.