We are seeing new records set in property values and I would argue that they are not good records to be having at this time.
The number of homes available for sale is falling and the price keeps going up. It is simple supply and demand you think about it. There are not enough homes on the market to meet the demand so prices continue to escalate. And while the Affordability Index isn't mentioned here, they do talk about housing affordability towards the end of the article. That's another index to be watching.
So why don't they build more single family homes? Personally I don't know. I have read that it is increased regulation from Dodd Frank so that 25% of housing costs go to permits and regulation requirements and when you factor in those costs with lower end properties, why bother. Most of the home construction in the last few years has been on the luxury side. I believe in the last year the average new construction finally dipped under $300,000. You're average Joe probably will not qualify to buy a $300,000 home. So they rent. It's a good time to own an apartment or a single family rental right now. However, all those Millennials that we were told didn't want to own anything are now buying up homes. They represent the largest home buying population in the US right now. Turns out just like every generation, they have babies and start looking at school districts and so they start looking for yards for their kids to play in. That's where the demand is coming from right now. Almost 50% of loan purchases this last January were by Millennials.
Anyways, to end my ranting, I'll sum up my two cents by saying that I do not anticipate the records to stop in the near future. It's going to take a change in regulation, or something worse like a major correction caused from something outside of real estate before we see home prices come down.