Analytics firm Clear Capital credits the warm weather homebuying season with the recent moves upward in home prices, but warns that the rest of the year might not continue that growth[1]. Despite a four percent gain in value in August compared to earlier in the year, national home prices are still 6.2 percent below last year’s levels and Alex Villacorta, Clear Capital’s director of research and analytics, believes that “the market is at a critical juncture as to whether it can avoid another significant downturn into the slower buying seasons of fall and winter.” He adds that “the latest readings on consumer confidence paint an ominous picture…at present” thanks to wide-scale uncertainty that is preventing consumers from taking advantage of low mortgage rates and high levels of affordability in most markets[2].
As prices continue to tumble overall, however, more and more investors are getting involved in real estate both as wholesalers and long-term owners and landlords. Are you making your move this year, or do you think prices have farther to fall?
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[1] http://www.dsnews.com/articles/home-price-gains-expected-to-wane-clear-capital-2011-09-07
[2] http://www.marketwatch.com/story/summers-last-stand-clear-capitalr-reports-us-home-prices-increase-40-2011-09-08
Downside risk is greater in most segments, markets and regions.
Anyone who puts too much stock in monthly price changes is kidding himself. Real Estate is very seasonal in good times and bad. Year over year statistics are much more reliable. Of course, rah rah groups like NAR always publish whatever makes the market look the most positive. Often they show prices rising in the Spring and Summer, then they switch to year over year statistics in the Fall and Winter.
Prices will continue to fall. There is no floor supporting the Real Estate Market.
Anthony Garcia
I think if it gets out about properties the banks are holding in default, but not putting on the books as “foreclosures” it will slow the home buying down quite a bit.