The roller-coaster ride taken by US housing in 2010 should start to level out, but still remain on its downhill course in 2011. With volatility stemming from the tax credit, and massive distressed sales plus the December slump now behind it, US housing can look forward to a busier spring and even better performance in select markets like DC and Houston. See the following article from Property Wire for more on this.
Residential real estate prices in the US were turbulent through 2010 ending up 4.1% lower than the year before and prices are expected to fall another 3.6% in 2011.
The homebuyer tax credit proved an artificial boost to property prices but that disappeared when it came to an end in April and the months after was probably the most volatile year in terms of prices in history, a new report claims.
Values fell 5.3% over the first 12 weeks of the year, then increased 9.7% through to the middle of August. But in the autumn months prices fell 9.4%, according to the analysis from Clear Capital.
‘In terms of home prices, 2010 has certainly been characterized by uncertainty. Tax incentives and high levels of distressed sale activity had counter effects on home prices which contributed to the fragility of the markets,’ said Alex Villacorta, senior statistician at Clear Capital.
‘The wild spikes experienced in 2010 will likely be replaced with more gradual price trends this year. Price forecasts show varying levels of decline across all four regions in 2011, with local markets in the West expected to accumulate the largest overall losses,’ he added.
Prices fell in 70% of the major markets in the US and half experienced double-digit drops. These included Dayton and Columbus in Ohio, Milwaukee in Wisconsin, Tucson in Arizona, New Haven in Connecticut, Jacksonville in Florida, and Virginia Beach and Richmond in Virginia. In Dayton, prices fell more than 22% from the year before.
And 2011 doesn’t look much better for these markets. Clear Capital expects all but Columbus and Milwaukee to experience double-digit declines again. But some markets such as Washington, D.C. and Houston, Texas are expected to see improvements.
The latest index from Altos Research shows that prices fell 1.63% in December, but new listings are hitting the market well below that. Prices fell in each of the 27 markets studied by Altos. They were down 4.77% in San Francisco, the steepest drop of any area, down 3.71% in San Diego and 3.16% in Minneapolis.
But Altos is more optimistic. It says the falls in prices in December were seasonal. ‘The data reflect seasonal trends and will likely begin to increase modestly as the boom of the spring real estate market begins,’ Altos said in its report.
‘As the spring housing market starts to swing into action, a spike in housing inventory can be expected, as sellers seek to capitalize on the most active period of the year for home sales,’ Altos added.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.