Part I – Prices Are
Rising at an Accelerated Rate
The price of a home is the
major consideration when deciding whether or not it makes financial sense to
purchase a house. Experts are not only projecting that house values will
increase in 2013. They are also more optomistic in the level of appreciation
they are projecting as the market begins to heat up. Here are some examples:
The Home Price
Expectation Survey
The latest survey
of a nationwide panel of 118 economists, real estate experts and investment and
market strategists reveals they project home values to end 2013 up an
average of 4.6% according to the first quarter. This is after they had
projected a 3.1% increase just three months ago.
Bank of America
In a report titled, Someone Say House Party?,
Bank of America analysts revised their projections upward:
“Home prices continue to show
momentum amid shrinking inventory and record high affordability, prompting us
to revise up our original forecast of 4.7% for home prices this year. We now
expect national home prices, as defined by the S&P Case Shiller home price
index, to increase 8% this year.”
Capital Economics
According
to a report in DSNews, Capital Economics also upgraded their
prediction:
“Strong demand and tight
inventory have brought existing home sales back to ‘normal’ levels, and further
gains are possible, according to the latest market report from Capital
Economics. Additionally, market conditions may prompt lenders to “loosen the purse
strings slightly” and lend a little more freely.
These conditions, combined with
broader economic indicators, lead Capital Economics to revise its previous
forecast of a 5% price gain this year up to 8%.”
Morgan Stanley
In an article from HousingWire,
Morgan Stanley
joined the party:
“Strong momentum in home prices
as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade
their home price appreciation projections to roughly 7% (from 5%) for 2013,
according to its latest global securitized credit report…
“The momentum in most metrics of
housing activity is running well ahead of the pace we had expected,” said James
Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.”
Not only are prices projected to
appreciate. Experts are actually revising their projections upward as demand
maintains its momentum.
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