Most People Who Bought Homes in Santa Clara County From 1960-1990 Cannot Afford to Re-Purchase Their Own Home at Today’s Prices!
To examine home appreciation I break it down for you in several different ways. First, at a national level we only look at the United States as the 48 contiguous states. The reason is that Alaska and Hawaii are totally different and the market reacts so dramatically and uniquely in these two states. Hawaii has land that is often not sold but “Ground Leased.” Since most owners there do not obtain title of ownership, it is not comparable to the rest of the country. As for Alaska, while everyone knows it for its minerals and natural beauty, most people would choose not to live there because of its natural hardships. So here are the results of the 48 states that are where most of our population chooses to live.
NATIONAL HOME PRICE APPRECIATION AND SUPPLY
Existing Homes
|
Home Price Appreciation (%) |
Months’ Supply (how long to sell off current inventory) |
Mortgage Originations ($ billions) |
30-year Mortgage Rates (%) |
1988 |
4.2 |
8.6 |
NA |
10.34 |
1989 |
0.2 |
8.4 |
NA |
10.32 |
1990 |
2.7 |
8.9 |
458 |
10.13 |
1991 |
5.4 |
9.0 |
562 |
9.25 |
1992 |
3.0 |
8.2 |
893 |
8.40 |
1993 |
3.0 |
6.4 |
1019 |
7.33 |
1994 |
4.1 |
5.4 |
768 |
8.36 |
1995 |
2.7 |
5.7 |
639 |
7.96 |
1996 |
5.2 |
6.1 |
785 |
7.81 |
1997 |
5.1 |
6.0 |
833 |
7.60 |
1998 |
5.4 |
5.5 |
1656 |
6.94 |
1999 |
3.9 |
4.8 |
1379 |
7.43 |
2000 |
4.1 |
4.5 |
1139 |
8.06 |
2001 |
5.8 |
4.6 |
2243 |
6.97 |
2002 |
7.5 |
4.7 |
2834 |
6.54 |
2003 |
7.6 |
4.7 |
3800 |
5.82 |
2004 |
7.0 |
4.5 |
2670 |
5.9 |
Notice that from 1988 through 2004, double digit appreciation has not been the norm! In fact, in most cases during the same time period, most homes sit on the market for a period of longer than 4 months before they receive an offer to buy them!
In the Nine Bay Area Counties we have been so spoiled and that is why we will continue to be a very strong area. We like it here and we like the results of living here!
Consider the relationship between the growth in appreciation, the months’ supply of housing, the amount of mortgage loans originated, and the rates of interest -- these are the numbers on a national level. Perhaps now we can truly appreciate and be really grateful for what we already have in our lives.
