Home prices in a larger number of cities are forecast to inflate in value in 2012 as many U.S. cities make inroads towards a housing recovery.
Signs of progress are developing in a growing number of U.S. states, including hard hit Florida, Michigan and Mississippi.
Improving conditions in many cities are attributed to growing job creation and higher prices being paid for some commodities, spurring home sales and higher prices as a result of growing demand. Near record low mortgage rates are also pushing the marketplace.
International demand for crops, particularly corn and soy beans are driving the prices to record highs being paid for commodities. The increase has moved into the local economy in the Corn Belt, with Nebraska, Kansas and Indiana home sales picking up. Banks holding off on formally foreclosing on many homeowners as a result of the robo-signing scandal has developed a shortage of discount priced foreclosures, driving the prices in some cities higher.
As the fallout from the robo-signing scandal develops, bankers will increase the number of foreclosures and are already improving the number of short sales with homeowners who are unable to make their mortgages. Average home values in Nebraska are forecast to increase in 2012, with Omaha leading all of the states cities at 3.9%.
Kansas was forecast at the beginning of 2012 to experience higher housing inflation for the year. Kansas cities are making progress towards their projected improvement. Indiana is now forecast to experience higher home values than first projected at the start of the year as an improving economy begins to fall in place.
Strides towards better conditions are also projected in at least one southern state, Mississippi. The real estate crash has been particularly tough on the hard hit Mississippi state economy, which has endured years of economic weakness as one of the nation’s highest prone poverty regions.
Home values are also forecast to improve in cities in Alaska, Oklahoma, West Virginia, Wyoming and Texas, where average home values are forecast to show healthy gains. Most cities experiencing higher home prices won’t see huge price increases, but with growing home sales in many areas higher values will develop.
Originally posted on Housing Predictor by Mike Colpitts
There is a certain level of anxiety when you are buying a house you have never seen in a foreign country you may never have visited in an economy that has seen better days. Yet on the other hand, investors the world over know that now is the time to buy property in America. Is there anything you can do to reduce your worries or even build your confidence?
Let us take a few minutes and check out what authorities are saying about their economy as a whole. This will help us gauge the investment potential within the real estate market.
One indicator of the economic recovery is an increase in job creation. The US Labor Department reports that job openings in the U.S. increased in February and hiring climbed to 3.3 percent which is the highest level in more than three years, indicating that employers are more optimistic about the economic outlook. Additionally, the unemployment rate has fallen to 8.2 percent in March, a three-year low.
“There is a pretty strong, solid uptrend in job openings,” said Michael Gapen, a senior U.S. economist at Barclays Capital in New York. “The labor market is gradually getting better when you continue to look across a broad swath of indicators.”
Another economic indicator is wholesale inventory. When this figure increases, it indicates that companies are seeing an increase in consumer demand. The Commerce Department reported a 0.9 percent advance in stockpiles following a 0.6 percent gain in January. This was more than initially estimated.
Now let us look into the foreclosure market. Much of the loss in real estate values has been caused by the glut of bank repossessed homes on the market. As long as the percentage of foreclosed homes is high, home prices will stay low.
And according to a recent report, an additional 1.25 million foreclosed homes are set to flood the market following a year-long investigation into lending practices. Walter Molony, a public affairs officer at the National Association of Realtors (NAR), says that this inventory problem has been a prime factor in the inability of the market to gain traction.
“The high level of foreclosures in recent years dampened overall home prices, and they have now over-corrected in most areas,” Molony says. “Homes are selling for less than replacement-construction costs in most of the country, and in most areas, it’s now cheaper to buy than rent a comparably-sized property.”
What does that mean for an Australian investor in US properties? It means that the economy in the USA is recovering. They are creating jobs which will lower unemployment which will provide their citizens with greater financial security which in-turn will increase spending. The positive cycle has begun.
Meanwhile, they will continue to have millions of foreclosed homes on the market. This will keep values low enough for international investors to scoop them up at discounted prices. Additionally, due to a recovering economy, you will be able to demand top dollar rental rates. The evidence is clear, now more than ever, it is a good time to buy US property.
