A recent study has found the housing market recovery in the US is likely to be uneven over the next five years. Some markets will recover much faster than others.
The study from the Demand Institute predicts that by 2018 the median price of a single family home will almost be at peak levels seen in 2006. The Demand Institute is a not-for-profit think tank that is operated by The Conference Board and Nielsen.
The article in aol.com shows some areas will appreciate far more than others, and that out of the 50 largest Metropolitan areas where house prices are predicted to increase between 2012 and 2018, the top five will see average price rises of 32% while in comparison the bottom five will see an average increase of just 11%.
Those cities expected to see the largest price increases on previously owned single-family homes include St. Louis, Milwaukee, Jacksonville, Tampa and Memphis. The cities expected to seek the lowest price appreciations are Phoenix, Minneapolis, Denver, Oklahoma City and Washington DC. The five states likely to see the strongest appreciation rates in median prices are New Hampshire, Illinois, Maine, Mississippi and New Mexico. The five states expected to see the lowest rates of appreciation are Alaska, New York, Virginia, Minnesota and Washington DC.
This report is the result of an 18 month research program that included interviews with 10,000 consumers and which analyzed 2,200 cities and towns in the US. It’s hardly surprising to learn that markets who saw the biggest price increases prior to the housing price and which subsequently recorded the biggest drops have much further to go to reach these prior peaks. One example singled out by the study is Nevada where prices in 2018 are likely to be 45% below peak values seen in 2006, and this would mean prices could be similar to those of 2002. Nevada was one of the states hardest hit during the property crisis, and values fell by 60% during this time.
The study also predicted that the national median price for a previously owned single-family home would rise more steadily during the coming years, whereas prices increased by 11.5% last year. Instead the study is predicting annual price growth of 2.1% from next year until 2018 as the market begins to even out. It’s anticipating that much of the demand during the next five years will be due to the formation of new households. As employment levels begin to rise and the economy continues to strengthen, buyers should find it easier to get into the property market, but in spite of this not everyone will be able to make their dream of owning a home a reality.