Homes See 25% Increase in Price, but Experts Fear Another Bubble

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SACRAMENTO-

It’s something millions of us do every day – walk into Starbucks for the caffeine we can’t do without.

But what if your daily order saw a 25 percent increase in price?

That’s just about what’s happened with home prices in the Sacramento metro-area according to Zillow, a real estate web-site.

Prices are up an average 25.4 percent and in some areas, like Citrus Heights, there’s been an even bigger jump.

“Price increase year-over-year had been about 34 percent.  I think we’re still seeing that same rate year over year and at some areas even more,” said Dan Eveland, a Century 21 sales manager.

Eveland says his most affordable home listings are now sitting in the $300,000 range.

If you just think about the Zillow average of roughly 25 percent in milk prices, $3.39 gallon of whole milk in 2012 would now set you back $4.24.

In the same kind of scenario, a $3.89 gallon of unleaded gasoline would now cost $4.86.

It all sounds good for the seller, but if prices keep rising in this housing market the market could again face big trouble.

“If we can keep the affordability index where enough of them that don’t own homes can still buy,  we’ll be okay. But if we push these prices too high we will create another bubble,” said Eveland.

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