7 Reasons to Fear the Housing Bubble | North Salem Real Estate

1. Healthy price rebound or too much, too fast?

The one-year period between March 2012 and March 2013 saw the most significant rise in housing prices since April 2006, with property values jumping up 10.9 percent. This number was markedly higher in certain areas, with San Francisco and Phoenix experiencing a gain in prices of more than 20 percent. While it is true that consumer sentiment is on the rise and spending is increasing, the availability of easier credit helps push sales higher and offer up a dangerous metric for those worried about future bubbles. As mortgage rates continue to be quite low — falling from 3.78 percent to 3.59 percent since May of last year — lenders are picking up steam in doling out cash; a feature that is capable of driving housing prices past what is likely sustainable.

7 Reasons to Fear the Housing Bubble | Wall St. Cheat Sheet.