US Property News - Home Price growth continuesâ

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March 2014 Summary

If we had all been blessed with great foresight we would have been investing in U.S. property in late 2012 when prices were at their lowest. However although home prices have been on the up through 2013 they are still way south of the peak price days and there are still great deals to be had.

Investors will still hold the whip hand over traditional homebuyers simply because price and loan interest rates are making it more difficult for family home purchasing against a backdrop of slow wage rises. With the increases in home prices and increased loan interest rates we have looked again at the buy or rent argument and find no financial case to rent albeit there may be many other reasons why that is a lifestyle choice. With the influx of property investors came the concern of what happens when they depart.

It seems from recent evidence that it is unlikely that we will witness a mass exodus anytime soon and in fact more investors are likely to be entering the market and remain in for the long haul. As we know there are any number of industry reports and home price indices available to provide guidance, however in many cases that simply causes increased confusion. The array of approaches and methodologies are bound to produce different outcomes so we probably need to be content with trends across the range rather than clinging to the numbers produced which do vary widely.

Analysts agree on continuing home price growth

We have previously argued in this blog that with the plethora of home price reports available and the numerous methodology approaches adopted the outcomes are bound to be very different across the range. We therefore concluded that no single report necessarily reflects the actual state of play and that the value is not actually in the figures but in the trend line. However there is also worth in appreciating the reasons that different approaches have been adopted. Zillow, the real estate research company, remains highly critical of the methodology adopted by the industry leading Case-Shiller. read more

Buying remains 38% cheaper than renting With the significant rise in home prices through 2013 and loan interest rate hikes we return to the question of whether renting or buying is a better financial bet. And even if buying might be the right financial option now, at what point do interest rate increases reverse that position?. read more

Home Price reports create confusion As we know 2013 reflected the best year of home price gains since 2005 however there are mixed views on whether that particular party is now over. Last month the S&P Case-Shiller Home Price Index report was suggesting that the strongest part of the recovery was over and that read more

Property investors view the long haul The results from a recently conducted survey, and feedback from an industry real estate summit, indicate the notion that property investors would depart in droves in 2014 appears to be a myth. According to Morgan Stanley not only are the majority likely to stay in, read more

Traditional homebuyers facing uphill battle Although average home prices across the nation are still well below the peak the typical homebuyer is still being priced out of the market in many major cities and coastal areas. In hindsight we now know that the most affordable time to purchase was toward the end of 2012 before the recovery kicked in. read more

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