There isn't a real estate bubble in southeast Oakland County

There are some concerns that the current rise in the housing market is an indication of a "bubble" in real estate.

Here is what Daily Real Estate News wrote on October 8, 2013...

"Robert Shiller... recent(ly) comment(ed) that the housing market was starting to look “a little bubbly.” Shiller, who co-developed the S&P/Case-Shiller Composite 10 Home Price Index, has said he’s concerned some markets across the country may be over-correcting and starting to resemble a housing bubble. "

The average sale price of homes in Berkley, Ferndale, Royal Oak, Madison Heights and Berverly Hills have risen 20 to 40 percent in second quarter over last year.  That is very strong growth year over year. (Follow the links for details on each community: Berkley, Ferndale, Royal Oak, Madison Heights and Berverly Hills).  No market can sustain that kind of growth for long and not burst.

But, Daily Real Estate News continues...

"However, a group of housing experts disagreed during the ABS East 2013 conference. Price appreciation is slowing, says Mark Fleming, CoreLogic’s chief economist. Fleming says that the rapid growth in appreciation in previous months was a correction after an overshoot in prices falling during the housing crisis."

That follows in the local market also.  The average sale price for all the communities mentioned above have experienced a slow down in growth over third quarter last year.  While still maintaining the gains made over last year, the growth is showing signs of leveling off at a more sustainable growth rate.

There are other reasons real estate will avoid the bubble that was so destructive to families and communties a few years ago, at least in the short and medium run.  There are changes in rules for lending institutions, the economy is improving at a more reasonable pace and, of course, there is the collective memory that make all of us a little more cautious; to name a few.

As I say every time because it is true, no one can know what is going to happen for sure.  But, indicators make this market look like it is going to last.

Morris Hagerman is a local real estate agent with Real Estate One in Royal Oak, Michigan.  He serves Berkley and the other Woodward 5 communities, including Ferndale, Pleasant Ridge, Royal Oak and Huntington Woods.  Hagerman is also a member of the Berkley/Huntington Woods Area Chamber of Commerce.  You can contact him by phone at 248-854-8440, email at morrishagermanproperties@gmail.com or visit his web page.