2012 has been surprising in how strong the buyer activity has been and also how much home prices have moved up. Certainly a much stronger year than I was expecting. While every metric used to summarize home prices has its faults, my favorite stat the last 18 months is Average Price Per Square Foot for Traditional Sales:
This chart shows why I think is a more accurate view of our housing market tumble: prices were almost consistently falling except for the period during the tax credit expiration in 2010. Notice the strong uptick at the end… since the start of this year? While the price per square foot is likely to fall in the coming months due to seasonal demand, the $10/sqft increase we saw this year was the strongest uptick seen in many years – it easily surpassed the $7/sqft increase during the tax credit time frame.
More Price Appreciation to Come
Buyer demand continues to remain strong – running 20% higher YTD than a year ago. At the same time, the supply of homes for sale continues to decline. As buyers have fewer and fewer homes to choose from, prices will drift higher. 2013 is looking very promising.