Report: 77 percent of Americans expect stable or rising home prices
Austin Business Journal - by Sarah Krouse Washington Business Journal
Seventy-seven percent of Americans expect home prices in their area to rise or stay the same in the next 12 months, according to a Gallup survey released Thursday.
The survey showed that 34 percent of Americans expect the average price of houses around them to increase in the next year, a 12 percent jump from last year and a sign that confidence in the residential real estate market is on the rise.
Gallup reports that 43 percent of Americans expect housing prices to stay the same in the coming year, a small increase from 42 percent last year.
In April 2009, the same Gallup survey showed that 63 percent of Americans thought housing prices near them would rise or stay the same. Confidence that prices will rise is strongest on the East and West coasts where 39 percent of people in each area surveyed predicted an increase in housing prices, compared to 34 percent of people in the South and 24 percent of people in the Midwest.
That confidence combined with low interest rates on government loans will mean more home sales in the short-term, Gallup said. Those sales, in turn, will stimulate the real estate market and larger economy.
Gallup’s survey found that 72 percent of Americans think it’s a good time to buy a new home, slightly more than last year — 71 percent— but 19 percent more than in 2008. Still the report highlighted the lingering issue of job creation as an obstacle to Americans feeling financially secure enough to buy a new home.
by Danielle Babb Thursday, January 24, 2008provided by
Whether you're looking for an investment property or a place to live, here's a look at the cities you should seek out and avoid in 2008.
The housing crunch and the excessive inventory -- exceeding 10 months on resale homes -- continues to take its toll on housing prices. But over the long term, housing is still a good investment. In fact, it's more than an investment; it's a home. Plus, you're not really saving anything by renting, as the costs of renting and owning are about equal (well, owning may be a little more). The tax benefits of home ownership far outweigh renting, too. With good housing prices in many great areas, this may indeed be the time to buy.
So now that I've convinced you this is a good time to buy a home, the next question is, Where do you buy one? No matter where you look, you should check out some basic economic fundamentals before buying. Is job growth stable in the area? Is income keeping up with inflation? Is crime above the national average? Is there a higher-than-average rate of foreclosures? These issues and others play a factor when deciding where to buy a house.
As a real estate investor and analyst, it's my job to provide buyers with qualified information on where to buy -- and where to stay away from. Here are my thoughts for 2008 based on the indicators noted above.
The Top Places to Buy
Whether you're an investor like me or you're looking to purchase that next move up, here are my picks for the best areas to buy a home:
Killeen, Round Rock, Austin, Texas: Killeen has the lowest average home price in any market in the nation while still maintaining quality. Round Rock and Austin have seen incredible job growth and very stable home prices despite the downturn nationwide. Jobs continue to grow here -- a factor for keeping inventory low and prices stable.
Mission Viejo, California: Mission Viejo has the lowest crime statistics in the nation. With no murders in 2007 and a low rate of violent crime, this is a good place to raise a family. Prices are relatively stable, and the job market in the nearby cities of Irvine and San Diego means there is consistent demand from job seekers.
Palm Beach, Florida: I'm taking a risk here because this area has been pummeled by foreclosures in 2007. But there are also a lot of boomers retiring, and Palm Beach is looking mighty attractive. If you don't like this high of a risk (which translates to great prices), check out Tampa or Clearwater in the same state.
Las Vegas, Nevada: Yes, Las Vegas has been hit hard by incoming investors, who watched their home values disappear and then left those homes empty. Las Vegas comes in quite high on the national foreclosure list, almost always within the top three metro areas. But there's an upside -- a very strong job market. In 2007, Las Vegas experienced a 12 percent increase in population, partly driven by retirees looking for Sunbelt states to move to. Coupled with low prices, we could see inventories reduced here, which would also stabilize prices. Be careful what you buy, but I like it.
Places to Avoid
And now for the places you definitely want to avoid:
Detroit, Michigan: The job market is in chaos. People are getting laid off left and right. National statistics seem to point to a significant problem with job loss and job income not keeping up with inflation. As a result, many nice neighborhoods are now abandoned due to people leaving their homes. Inventories exceed one year (under six months is what we want to see), and the foreclosure problem hit Detroit hard. With fewer jobs to support home purchases, I don't see Detroit turning around anytime soon.
Miami, Florida: Palm Beach is different than Miami, which sits in its gorgeous aqua water with half-built and abandoned condos, a shrinking job market, a tough time getting insurance against hurricanes and a job problem. Yes, you can get a good deal, but do this only if you don't need the appreciation from the home in the next decade.
Riverside/San Bernardino, California: Even those lucky homeowners that bought before the boom are feeling it now. Riverside and San Bernardino counties in Southern California consistently lead California in foreclosures and rank in the top three metro areas nationally. The prices have plummeted, and jobs in the area are scarce. People moved there due to lack of affordability in Orange and Los Angeles counties (where their jobs were), so it's a commuter's area. Now that prices in the two counties have dropped, people can live close to their jobs. Although I grew up in Riverside County, I could never recommend it to anyone looking to buy a home.
RAY SUAREZ: Mark Dotzour, how does Texas resemble what you just heard from Massachusetts and California? And how does it resemble the nationwide trends?
MARK DOTZOUR, Texas A&M University: Hello, Ray. It's good to visit with you. We down here in Texas we have a real, unique situation going on right now. We've got a combination of very strong job growth. It's basically double the national average. We've got home price appreciation that's going up at an increasing rate in many of our metropolitan areas.
And at the same time, we've got population growth. I noticed just last year we had 570,000 new people come into the state of Texas. And at the same time, the home builders have cut back on production, as well, like you've previously heard. And so we're in kind of an interesting position, where home builders are cutting back on their building, but inventory levels of homes for sale are quite low. And that's why we're seeing the good rates of price appreciation in many parts of Texas.
RAY SUAREZ: And let's finally stop in Michigan. Donald Grimes, how's the scene there?
DONALD GRIMES, University of Michigan: Well, you described the national housing market as grim. And if it's grim nationally, it's doubly grim in Michigan. The housing market in Michigan is in very, very bad shape and, unlike the rest of the states that you have talked to and mentioned, the problem in the housing market in Michigan stems from a very weak economy, a weak economy that has lost jobs in each of the last six years, and last year Michigan's population actually declined.
So the weak housing market results from a weak economy. It's not a cause of the weak economy. And in order for Michigan's housing market to recover, the local economy has to recover or at least stop falling.
