Home Prices May Decline over the Next Year
As America's cheaper begins to cool, a number of economists have begun to predict only modest gains in the prices of single-family homes during the next year. The consensus is that home prices will rise between 3 and 4%, which is a respectable increase, but well below the 10% nationwide mean over the past five years.
Home Prices May Decline over the Next Year
Ironically, the biggest slowdowns are likely to take place in the areas of the country that have seen the hottest real estate markets over that five-year period, together with New York, Los Angeles, and Las Vegas. However, the real estate price slowdown is foreseen, to reach many other parts of the country over the procedure of the next year, as well.
In an entertaining twist, a number of real estate markets that have been slow over the past five years will begin to see upturns as the affordability of their home prices begins to catch the eye of buyers unwilling to pay the rapidly rising prices they see in other areas. In fact, a number of the areas that are foreseen, to see the most rapid price rises may surprise you. For instance, five of the top ten cities are settled in Washington State, led by Wenatchee, which is foreseen, to see a 16% gain over the next year. The nation's fast-rising real estate prices are foreseen, to occur in Panama City, Florida, at 21%. Surprisingly, El Centro is the only California city listed among the top ten markets, which should raise a number of eyebrows.
Those double-digit increases are again respectable, but nowhere near the 20% mean growth for America's top ten fastest rising home prices over the past five years.
The other four Washington cities and their rates of growth are: Mount Vernon (14%), Yakima (13%), Olympia (13%), and Spokane (12%). Two other Florida cities made the top ten list: Lakeland (14%) and Ocala (13%). Rounding out the top ten was Flagstaff, Arizona (12%).
Some areas of the country that have been quite hot over the past some years may positively begin to caress price declines, such as Santa Barbara, California, which may see a 3% decrease in its mean home price. Las Vegas may also caress a similar price decline over the next year.
The slowest gaining areas of the country over the past five years have been in the Midwest and South, and especially in Ohio and Indiana, which contributed five of the slowest American real estate markets during the duration from 2001-2005. For instance, Lafayette, Indiana, averaged just 2.3% annually over that time, which represented an growth of only 10% of the gains experienced by the nation's hottest real estate markets. The largest city among the bottom ten markets was Memphis, Tennessee, according to the Census Bureau, with a population of about 700,000.
Whatever the statistics above stated, it should be pointed out that many flourishing investors make a lot of money in the those cities labeled "the bottom ten." No matter what happens in the home market, smart investors know how to make money in real estate.
All in all, real estate prices should rise somewhat, unless you happen to live in one of those areas that has been red hot since 2001, but don't expect to see the spectacular increases you've seen over the past five years.
Copyright © 2006 Jeanette J. Fisher
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