An Optimistic Housing Report
In some good-for-a-change housing market news, S&P/Case-Shiller reports that 2009 home prices actually increased in several of 20 metropolitan areas studied. Overall, prices dropped 2.5 percent, mostly because of hard-hit areas like Las Vegas, Tampa, and Detroit, where prices declined 20.6 percent, 11 percent and 10 percent respectively.
But in San Francisco, Dallas and San Diego, prices rose by 4.8%, 3% and 2.7%. Overall, there is an indication that year-over-year declines in some markets are reversing, which may mean the market is beginning to show signs of stabilization. In fact, Las Vegas actually showed an increase in home prices in December, 2009—the first such increase in three years.
Do these price reversals mean the economy is finally on a rebound? Maybe not. With unemployment still high, and all indications pointing to a slow recovery in the job market, we probably should not plan on rapid home value appreciation and another housing boom any time soon. More likely the government’s involvement through the home buyer tax credit and buying up mortgage-backed securities is bolstering the housing market.
What does this mean to investment property owners and buyers? Is now a good time to get back into the market? There is no single answer to that question; like most investment questions, it’s best to ask your professional financial advisor. The experts say that while mortgage rates won’t stay this low forever, we’ve probably seen the last of the housing market buy/flip mentality for a while. We should all put our “buy before the price doubles” mentality on the shelf. At least for now!