The housing market is really heating up, with many areas of the country reporting rising prices and even bidding wars. Mark Perry has lots of details here and here. I offer some charts to complement his:
Based on the chart above, it looks as if the best that can be said for housing prices is that they have been relatively flat over the past four years.
But as this chart shows, housing prices as measured by the Radar Logic folks (quite similar to the CoreLogic data Perry uses) are up over 10% in the past year. We haven't seen anything like this for a very over six years.
To better appreciate what is going on, I offer the above chart, which compares the Radar Logic price index in 2011 (orange) to the index in 2012 (white). Instead of following their normal seasonal pattern (in which prices tend to fall from summer through winter), prices last year didn't fall at all. On a seasonally adjusted basis, therefore, prices are up significantly. This is a very important change on the margin.
One of the key characteristics of today's housing market is a shortage of homes for sale. As this chart shows, the inventory of homes for sale is about as low as it's ever been. Presumably, the recent strong price action will convince banks and homeowners who were reluctant to sell at depressed prices to put their properties on the market in the coming months, which are traditionally the strongest for housing sales. If they don't, prices could rise even more.