March brought additional good news for residential real estate with home prices continuing a steady ascent, underwater homeownership falling and homebuilders as busy as they’ve been in more than four years.
The S&P/Case-Shiller 20-City Composite index released March 26 showed January home prices posting their largest year-over-year increase since the summer of 2006. The index, which tracks single-family home prices in 20 large cities, improved 8.1% with all 20 cities posting year-over-year price gains.
Nineteen of the 20 cities in the index showed acceleration in their year-over-year returns with only Detroit posting a modest price slowdown. Even New York home prices, which endured more than two years of consecutive year-over-year declines, turned higher. Phoenix and Las Vegas registered the highest annual gains along with San Francisco.
David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, suggested more price strength ahead. “Economic Data continues to support the housing recovery,” he said. “Single-family home building permits and housing starts posted double-digit, year-over-year increases in February 2013. Steady employment and low borrowing rates pushed inventories down to their lower post-recession levels.”
Logically, the lack of inventory has slowed home sales in some markets yet rising prices are encouraging more people to place their homes on the market. Existing homes for sale rose 10% in February, according to the National Association of REALTORS®.
Rising home prices are also driving down the threshold of underwater homeownership. CoreLogic reported in late March that another 200,000 residential properties returned to a state of positive equity during Q4. For all of 2012, 1.7 million homes moved from negative to positive equity, CoreLogic said.
Rising home prices are also driving down the threshold of underwater homeownership. CoreLogic reported in late March that another 200,000 residential properties returned to a state of positive equity during Q4. For all of 2012, 1.7 million homes moved from negative to positive equity, CoreLogic said.
Accordingly, household real estate wealth increased by $1.4 trillion in 2012, according to the Federal Reserve, which suggests that more homeowners will return to the real estate market to buy and sell.
Higher home prices also have activated homebuilders, who in February broke ground on a seasonally adjusted annual rate of 910,000 homes, the second-fastest pace since June 2008, according to the Commerce Department.
Higher home prices also have activated homebuilders, who in February broke ground on a seasonally adjusted annual rate of 910,000 homes, the second-fastest pace since June 2008, according to the Commerce Department.
In all, real estate’s recovery enjoys a broad base and balance is returning to the market – just in time for the spring buying season. If you or someone you know is considering taking advantage of this incredible opportunity in real estate, please visit www.prucalhomes.com or call (888) 352-1652.
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