Double Digits Price Increases Coming Soon?
If you are in the market for a home, or you are preparing to sell your home, you need to get ready to act. Evidence suggests that those markets that have been hardest hit during the latest housing crisis are showing strong signs of recovery and are expected to see major gains in price, and soon. And with mortgage rates low, many of those in the market for a home have already started to get in on these bargains.
Those markets in particular that were affected the worst during this crisis – where foreclosures skyrocketed and house prices plunged – are expected to see some of the biggest increases as we head into 2013. This is according to a report released this week by Fiserv, a leading global provider of information management and electronic commerce systems for the financial services industry.
Fiserv recently suggested that average prices for homes nationwide could increase by as much as 4 percent over the next five years, and will begin this rebounding as early early as late 2012. According to David Stiff, Fiserv’s chief economist, this is due to the fact that many markets may have jumped past the downside and now people are quickly trying to catch the bottom of the market.
In a separate report issued by the National Association of Realtors, the average home price declined by just 0.4 percent in the first three months of 2012, as compared to the same span in 2011.
In addition, about half of the approximately 150 metropolitan areas surveyed by NAR show a price increase, as buyer activity across the country begins to gain momentum. The inventory of homes available for purchase nationwide has dropped by about 22% since last year. Given the smaller supply and the higher listing prices, home prices are expected to show further gains in the coming year, according to Lawrence Yun, NAR’s chief economist.
Prices of homes for sale will also show increases as banks decide to pursue short sales instead of foreclosures. Those homes that have been repossessed can typically sell for up to 50 percent less than homes sold by conventional sellers. This according to Daren Blomquist, a spokesman for RealtyTrac, a firm which deals with with the marketing of foreclosed homes.
There are certain areas of the country that can expect to see the biggest gains, according to Fiserv’s report. Leading the pack is Madera, California, expected to see a shocking gain of nearly 21.5 percent by 2013. This particular market fared well during the housing boom with average home prices surpassing the $300,000 mark, according to the National Association of Home Builders. Since then, prices have fallen by more than 50 percent, to about $125,000.
Not far behind is Medford, Oregon, which can expect to see gains of more than 20 percent. Following that is Yuma, Arizona, where those in the market will likely see an increase of over 16 percent. Rounding out the top four is Corvallis, Oregon, which is projected to see an increase of over 11 percent.
This is all good news indeed for those buyers and sellers who have been biding their time waiting for the market to recover. It seems some good news is not far down the line at all.