Real Estate Blogging

Last Friday, Federal Reserve Alan Greenspan addressed the issue of the apparent "housing bubbles" in certain locations across the country. Greenspan stated that there are "a lot of local bubbles" that have experienced increased home prices that he believes to be "unsustainable" over time. Although Greenspan stated that the prices were "unsustainable", he did not feel that there would be a significant decrease in prices or that it would have a huge negative impact on homeowners.
One of the "local bubbles" that Greenspan was probably referring to is in Southern California where the median home price has broke the $500,000 threshold. After calculating April's sales figures, the median home price jumped to $509,230! So far the dramatic price increases in this area have not reduced the number of homes sold - "Sales in April rose 3.7% from the previous month to a seasonally adjusted, annual rate of 658,060 homes." However, as prices continue to increase, the market will approach a point where they are no longer affordable to the buyers in the market and the number of homes sold each month (and the price) will begin to decrease.