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Home price gains over the past few years are deceptive, says Keith Jurow for MarketWatch.

He writes:

Consider RealtyTrac’s latest report on 148 major U.S. metropolitan areas. The average gain on the sale of property was 30%. Not bad, except the average holding period was just over eight years. That comes to an annual price increase of 3.75%. High-yield corporate bonds would have earned you considerably more.

Home sale volume is also weak, he says.

During the insane bubble years, sales volume rocketed along with prices. In the hottest metros, desperate buyers dove into the market in record numbers. This has not happened since 2013. Statistics from brokerage show that sales volume has declined substantially in all major metros from the torrid pace of 2005-2006. Most analysts have attributed the weak sales, as well as rising prices, to a lack of available inventory. The number of homes listed for sale has indeed fallen dramatically over the past five years, but look closer: Trulia’s Inventory and Price Watch, first published in March 2016, divides homes for sale into three segments: (1) starter homes — the least-expensive homes for first-time buyers; (2) trade-up homes, and (3) premium homes.

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