What Were We Excited About Again?

Boston Housing Prices Showing Signs of Life (Photo credit: Matthew Simoneau)

I like to look back at what professional committees have stated in the past about real estate markets to assess if they have learned anything about the instability of the real etate market. Looking at this report from a few years ago, it's clear that they have not:


The Office of Federal Housing Enterprise Oversight (OFHEO) analysis of the housing market points to strong growth nationwide over the past year: “Average home prices increased 12.50 % from the first quarter of 2004 through the first quarter of 2005.” The Feds even forecast a strong increase in housing prices: “The HPI shows the rise in house prices continues at an extremely strong pace…”

For those of us investors in the Nevada market, we continue to see strong growth: “The biggest price increases in the House Price Index (HPI) during the past year occurred in Nevada, with a 4-quarter increase of 31.2 percent.” Reno experienced a 31.78% appreciation and Las Vegas experienced a 33.25% appreciation in one year. Nevada also has the second lowest Annualized Volatility Estimates in the Nation at 0.0682


At the time, that was excellent news for anyone looking to invest some of their life savings. Of course it's always better to deliver good news to increase investment and stimulate economy, but doing too much of that is puts our entire world economy at risk when there's not much to be happy about.

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