Bay Area home prices rise 18 percent — how much higher can they go?
Blanca Torres| June 25, 2014| San Francisco Business Times| Link
As housing prices inch toward or past pre-recession levels, we have to ask, how much higher can Bay Area home prices go?
Home prices in region pushed up 18.2 percent in April compared with the previous year, but have gone up a whopping 47 percent over two years from April 2012 to April 2014, according to the most recentS&P/Case-Shiller Home Price Index.
“In all recoveries, the market has regained peak values (of the previous cycle) within a year or two,” said Patrick Carlisle of Paragon Real Estate Group. “Once economic recovery begins, the market goes crazy. There’s so much pent-up demand.”
We may be past the crest of the crazy. Home price growth is slowing down — April was the first time in 13 months that the region’s housing market grew by less than 20 percent year-over-year. Still, prices are going up.
During the past two decades, Bay Area home prices have followed a similar pattern during economic cycles: They go up, then they go down and then they go up again, but each time they go up, they go up higher than before. And depending where you are looking, we may not be at that point yet.