10% Home Price Jump Possible in USA
The article (and it’s link) are posted below, but in the opinion of Rohit Prakash, President of American Full House, a 10% increase is not going to happen. It is one thing for inventory levels to drop, prices to stabilize and perhaps increase over the next year. In addition to the large number of homes in the foreclosure pipeline, a “better market” will bring in more sellers who have been waiting – that will bring more inventory to market.
However, what this clearly shows is that our markets in the US are becoming healthy again and Rohit is convinced that over the next few years as foreign capital continues to pour in, prices will appreciate. It is a great time for investors to buy properties at depressed prices while offering great yields that cannot be found anywhere else, while counting on the capital appreciation ahead.
National Association of Realtors Chief Economist Lawrence Yun said he “would not be surprised” if U.S. home prices jumped 10% by June of next year.
June 26th, 2012, 8:06 am
If true, that would be significant after three or four years of falling home prices.
“The market is healing,” Yun said recently at the National Association of Real Estate Editors conference in Denver.
Several factors triggered Yun’s enthusiasm: Strong demand among buyers, higher sales, lower number of homes for sale, and a level of foreclosures that – while high – has steadily decreased over the past two years.
Distressed sales – foreclosed and underwater homes – account for a fourth of the market this year, compared to a third last year, he said. By next year, they’re expected to account for 15%.
“This time next year, there could be a 10% price appreciation. I would not be surprised to see that,” Yun said.
But he quickly amended his comments after fellow speaker David Crowe, chief economist of the National Association of Home Builders, challenged Yun’s prediction on housing starts.
Yun believes that starts – the level of new homes breaking ground – would increase by 70% to 80% next year if construction loans become more available, especially for small builders.
If so, Yun told journalists, “then the prices will increase much faster,” he said. “The housing market in 2012 will show a recovery after a long bottoming.
