A four bedroom house in 1996 cost $186,000. Now, that exact same four bedroom house sells for $325,00. I am specifically referencing my childhood home, which we purchased BRAND NEW in 1996, and sold in 2007 for almost double. We had not done any significant improvements on the house or the land. There have not been any huge economic booms in this area either. This is an area of hospitals, doctors etc. Known to an economist as a "Medical Hub", areas like mine very infrequently change in economic status or in property worth. Simply living near a hospital or large amounts of medical facilities is lauded as financially smart, because the economy of these areas is extremely stable due to the type of business that drives the area being extremely stable (people will ALWAYS need doctors).
And that's not the worst of it. My childhood home was resold again last year (2012/2013 switch) for a whopping $513,000. The new owners only added one thing: a fence. They fenced the yard. That's it. They didn't even replace the carpet since we last did and yet the supposed "value" of the home increased that much.
Are we now rid of predatory lenders? Sure. That's over and done with. Is the housing market still a serious problem? Also yes. So we DO need to worry about it.
When the income of the average earner in this country has only increase 10% in the last 20 years, and the value of a house has increased 275% (186 to 513), there is a BIG problem. It's not so much that the housing market is in trouble. The housing market is clearly doing fine. The common man is in trouble.....Due to the housing market. Someone at my level of income could have purchased my childhood home in 1996, but today? My entire family income is not enough to even DREAM of buying that exact same house. And we almost make more than my parents did. To give you some idea of a comparison, my parents made about the same amount of money as my husband does (stay at home mom here). They could afford a four bedroom house in a nice area. Me and my husband, making the same amount of money, can afford a two bedroom house ten or more miles north of here, closer to the city, not as nice area.
Should we still be worried about the housing market? Yes, but only insofar as we give a dam about how it has affected the standard of living of the common man.
It seems the housing market is always fluctuating back and forth. One day it will be doing great, and then all of a sudden you hear about how it is doing terrible. We all need to make sure we plan for the future when it comes to one of our most expensive and basic need.
I don't think we need to be as worried about the housing market in 2014, going on 2015. 7 years on, while the banks are still greedy and corrupt, they did learn that giving away home loans to just anyone nearly killed their industry. They won't make that mistake again.
I do not think that we should be worried about the housing market. It has bounced back a little bit and it has also been a lot more stable recently, leading me to believe that the trend will continue. There is little chance that the market will go back down again.
We should not worry about the housing market because the real nightmare in the market is over. The 2008 to 2009 Great Recession was the big kicker. Although many of those people never recovered their homes and are still struggling, the future of the rest of the housing market should be more stabilized now.