Property values rise in October, momentum could carry into 2013
Posted on Wednesday, December 26, 2012 at 5:13:19 PM
Home prices appreciated significantly so far this year, and they continued this upward trend in October. While this makes the prospect of buying property more expensive, it could indicate that the real estate recovery has finally taken hold across many parts of the country.
During the month, property values increased 4.3 percent on an annual basis in the 20 major cities surveyed for the latest Standard & Poor's/Case-Shiller Home Price Index.
"Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength," said S&P Index Committee chairman David Blitzer. "Higher year-over-year price gains plus strong performances in the southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy."
On a local basis, most major metropolitan areas examined by the index reported home prices gains, however, there were some exceptions. Both Chicago and New York City posted significant year-over-year declines, though these could be seasonal trends, as housing market often experience slowdowns in the fall and winter months.
In contrast, Phoenix home prices had the largest gain from October 2011, spiking 21.7 percent during the 12-month period, the report said.
Future of housing appears bright
Although local housing market continue to recover at different paces, the overall sector is expected to post notable gains in 2013.
In a recent survey of more than 110 economists and real estate experts, the general consensus is that home prices could increase an additional 3.1 percent during the course of next year, according to Zillow.
"An organic recovery in the housing market really took hold in the latter half of 2012, and this improvement is echoed in some of the most optimistic price projections we've seen in years from this group," said Zillow chief economist Stan Humphries.
So far this year, record low mortgage rates and improving economic factors, such as employment and income levels, have contributed to the real estate industry's recovery. Despite the impending 'fiscal cliff' improvement in these areas are expected next year, which could further bolster housing market activity.
Although mortgage rates have remained below 4 percent for all but one week so far this year, prospective borrowers should remember that the exact rate they receive depends on their personal financial standing. Consulting a mortgage comparison chart from Home Loan Investment Bank could provide a more informed idea.