The next twelve months should see yet more improvements in the nation’s housing markets, propelled by record-breaking low mortgage rates and improving unemployment statistics, according to several real estate experts.

Steve Storti, Prudential Fox & Roach REALTORS’ senior vice president of marketing, told the Philadelphia Inquirer that by the time we look back on 2012, many people will see it as a transitional year:

“Just as you can only declare a recession after the fact, maybe we’ll be able to say this is when it changed over.”

Storti cites the fact that home prices are on the up across the nation, and most markets are expected to see this trend continue for the near future at least. Phoenix, Arizona, which was one of the hardest hit markets in the housing crisis, has seen home prices jump by an incredible 21.7% over the last twelve months. Meanwhile, the National Association of Realtors said that nationwide, sales of previously owned homes soared by 5.9% in November compared to the previous month, with sales increasing by a whopping 14.5% compared to November 2011.

One of the biggest factors behind these rising prices is thought to be the decline in inventory. Across the nation, inventories have fallen to just 4.8 month supply on average, the lowest level since December 2011.

Another area showing promise is that of new home sales. Last month, total sales of new homes reached their highest level in two years, while the median sales price rose to $246,200, up from $237,500 the month before. However, IHS Global Insight warns that while the new home market is improving, it still has a long way to go before we can reach what is considered a ‘normal’ level of sales, and will not likely do so until 2015 at the earliest.

Main image © SVLuma – Fotolia.com

Rural real estate is faring much better than its urban counterpart. Courtesy of Media Point

Certain states such as Alaska, Iowa, North Dakota and South Dakota have economies which are dependent on sectors which are performing more strongly, such as energy, agriculture or industry. Although house prices here didn’t rise as steeply during the boom years, they haven’t fallen as steeply during the subsequent crash. Unemployment rates in these states also tend to be lower than the national average.

Jim Diffley, regional housing economist for IHS Global Insight says “Housing is a mess all over the place, but it’s less of a mess in some places.”

Jonathan Smoke, executive director for Housing IntelligencePro, which tracks real estate in 800 markets throughout the US thinks that several of the smaller Midwestern states seem to be on their way to recovering.

Housing IntelligencePro compared sales of homes in the 12 months ending to March with sales in 2006, but excluded distressed sales. This enabled them to have a clearer picture of how a normal market would look. Figures showed that sales in North Dakota, Wyoming and Iowa have rebounded the most strongly, while sales in North Dakota were actually up when compared with 2006 levels.

Experts say that Alaska properties are unlikley to lose any more value. Courtesy Deviant Art

The figures showed that sales in Wyoming and Iowa were at around 70% of their 2006 levels, while in 34 of the 47 states surveyed, sales volumes were less than 50% of their 2006 levels. Property in Alaska and South Dakota appeared to be the least likely to suffer any further price falls, as the local economies here are relatively strong, according to Capital economics economist Paul Dales.

Prices in Alaska rose by 2.7% year on year, according to the Federal Housing Finance Agency, while nationally they fell by 5.5%. According to Moody’s Analytics, no US region will see stable house prices until later on in the year.

Home prices rose slightly last month, according to the Case Shiller Index. Image courtesy of Chattanooga Real Estate Blog

It is the first time in eight months that prices have increased, and S&P feels it may be due to a seasonal uplift in sales rather than a change in market conditions. The current statistics for the housing market still paint a very mixed picture, as single family housing starts rose in May, but sales of existing family homes decreased.

Dave Blitzer, chairman of S&P’s index committee says ”It is much too early to tell if this is a turning point or simply due to some warmer weather.” According to the committee, several more months of sustained price rises are needed to call it a real recovery.
Although prices rose in April, year on year they were down by 4%, which is the largest price fall in 10 months. The only metropolitan area to register a substantial price rise year on year was Washington DC.

Sustained price rises aren't expected for some time yet, say experts. Image courtesy of Daily Mail

Overall, IHS Global Insight predicts that prices will fall by another 5% this year. Zillow.com also expects prices to drop a little further before the market finally bottoms out in 2012. The chief economist of Zillow, Stan Humphries says “Things are moving in the right direction,” but he predicts it will be several more years before prices begin to increase once more. He then expects to see rises in the historically normal range of between 2% and 4%.

Since the global economic crisis, prices in the US have dropped by an average of 33%, with lower priced homes being more susceptible to sustained losses. Prices for lower priced homes have fallen by 45% compared to 25% for more expensive properties. It’s expected that this trend will continue due to tighter lending constraints affecting first time buyers.

Greece faces numerous problems selling off its state properties. Courtesy of Hurriyet Daily News

However the banks charged with the sale have a difficult job ahead. All in all, nine domestic banks are advising the government, and must examine each property individually to ensure they can actually be sold legally.

This is a tricky task as Greece is the only European country that doesn’t have a centralized registry of deeds. According to George Papaconstantinou, who was Greek finance minister until June 17, around 40% of state registered properties are disputed while another 25% have legal status which is somewhat questionable.

Laws passed last November which should have sped up the sale of state property have failed to make any impact, and the government has failed to appoint a general secretary for real estate. Part of the problem is that the government hasn’t really decided what to do about the sale of state assets, and is still considering several options including 99 year leases, sale and lease back deals, or packaging assets into publicly traded securities.

The government is desperate to do something to appease protestors in the country, but the sale and lease back plan has many holes in it, experts say. Courtesy of Sulekha

Not everyone thinks this is a good idea, and certain major developers have already said they will not risk purchasing and developing land from the government if it is only leased.

Apparently Greece is the wealthiest European country based on state real estate assets as a proportion of economic output.