GOOD NEWS STORY

The median price of residential resale properties in Bucks County went from $149,900 in the first quarter of 2000 to $248,000 in the first quarter of 2009.

To the untrained eye, that is

good appreciation : 65% appreciation overall, with annual appreciation of 5.75%.

Comparing investments, do you know anyone who invested in the stock market in 2000? The return on stocks has been less than 65% during the current decade.

LESS THAN GOOD NEWS (BAD NEWS?) STORY

To the trained eye, with the benefit of the chart below, life is not so pretty for those who bought from 2004-2008. From 2000-2005, the median price in the first quarter of the year increased from $149,900 to $265,000: an increase of 76%, annual appreciation of 12%. Did you ever wake up on some of those mornings when the market was going bananas (2003 -2006) and say to yourself, “this can’t go on forever . . .” Well, you were right. Historically, according to NAR statistics, median prices for singlefamily homes average an increase of approximately 5% per year over a decade:

 

In the 80s, the national median price increased 5.3% annually

In the 90s, the national median price increased 4.65% annually

. . . THE REST OF THE STORY (homage for Paul Harvey fans)

The picture is similar in other counties in the Philadelphia area. The market exceeded the above NAR standards earlier this decade and there is a price to pay for those excesses. In short, the market has a hangover and the first quarter was not a pretty picture. From a “market stabilizing” perspective, given that we have decade long appreciation of 5.75% annually, Bucks County is closer to the NAR standards and,

hopefully, this means that our market has almost “settled.”

Taken From Mr. Chips School of Real Estate News