MINNEAPOLIS (WCCO) — After years of housing woes, the news has started to turn.
One survey of U.S. home prices just charted a jump of 4.6 percent compared to August last year, the largest increase in more than six years, according to CoreLogic.
So are we out of the woods? And when will our homes be worth what they used to be worth?
“At some point we may. It’s probably gonna be a long time, though,” said Herb Tousley, director of the graduate real estate program at University of St. Thomas.
CoreLogic said its national measure of home prices is 26.7 percent below the April 2006 peak.
On Facebook, Curtis Nelson says his house was worth $175,000 at its peak; $135,000 now. Scott was at $216,000; now his house is worth about $150,000 “on a good day.”
“It’s hard to say exactly [how long it will take],” Tousley said. “The main thing is that people shouldn’t expect we’re going to bounce back in the next three or four years, I don’t see that happening.”
Tousley does a survey of Twin Cities prices, and he’s seen six months of growth. The median home value is about $220,000 right now, down from the April 2006 peak of $240,000. But prices are up $6,000 just over the past couple months.
He points out that, over the past 40 years, housing values slowly went up until the early 2000s, when they shot up.
“At the very peak in 2005, 2006, that wasn’t real,” he said. “We were certainly in a bubble.”
The bubble burst. But with six months in a row of housing price growth, are we out of the woods?
“I’ll feel better when we get through the end of the year, if things keep going the way they appear to be going, we’ll be in good shape,” he said.
Tousley said a key factor is that the number of foreclosures and short sales is on the way down. In August 2011, those made up 45 percent of all Twin Cities home sales. Now, it’s 36 percent.
When it comes to housing prices, Tousley suggests “we’re probably back to where we were 8 years ago, 9 years ago.”
The experts don’t want things to quickly bounce back. Slow, steady growth is better, they say.
“If the value of your home is down, you don’t have to sell,” he said.