Sep 06, 2013
Asking prices are up, but the rising is slowing: Trulia
06 Sep 2013
Posted by Andrew Kantor
Every month, Trulia looks at asking prices for homes and asking rents for rentals. And they’ve been going up for a while now.
In its latest report, for example, Trulia found that asking prices were up 11.0 percent in August from a year before (and up 1.2 percent month to month).
But the company adds an important note: It found that the rate of those price jumps was slowing.
When it looked at the numbers in three-month chunks (e.g., May-June-July vs. June-July-August) numbers, it found that price rises were tapering off.
Feb-Mar-Apr: +4.0 percent
May-Jun-Jul: +3.2 percent
Jun-Jul-Aug: +3.0 percent
does might that mean? It could indicate that the recovery is slowing down. Prices plummeted in 2007-2009, and have been recovering — very quickly, in some cases. There have even been rumblings that we’re not seeing a recovery, but a new bubble.
That may in fact be the case (although I’m skeptical). But if price rises are tapering off as Trulia’s numbers suggest, that could be good news. Don’t get me wrong: Rising prices are good, and we need to get back to pre-bubble normal. But we don’t want that to happen too quickly.
Put another way, saying “the recovery is slowing” is not necessarily a bad thing, if that recovery is happening too quickly. A strong, steady recovery is best for the long run.