For the last 2 years we have been talking endlessly about how fast home prices have been rising as the average sale prices of a single-family detached home last month was $792k. Is this price too high?
In 2006 the average sale price of a single-family detached home was $322k. If home prices had never dropped and just continued rising the annualized appreciation would be 5.75% over the last 16 years. Our 50-year average is 6.50% now. If prices had appreciated at 6.50% for the last 16 years the average price of a single-family detached home would now be $882k. Thus, a price today of $792k doesn’t look so high.