The USA Today is reporting that average home prices in the U.S. will rise almost 4% a year for the next five years. Markets, such as Miami, FL, may see an increase in sale prices at the end of the summer before finally leveling off.
In predicting this rise, many of the leading home price indexes, which measure the U.S. residential market and track changes in the value of residential real estate, point to several different factors. Among them are investors, good affordability, low inventories, and the fact that conventional mortgage payments now account for just 12% of median family incomes versus a historic norm of 20%.
Florida, having more cities than any other state, has show the strongest signs of recovery. This is especially true for cities such as Orlando and to absolutely nobody’s surprise, Miami . According to Realtor.com, prices of homes in Miami are up 20%, in some areas, and inventories down in excess of 40%.
Indeed, home values in South Florida rose 1.1 percent year-over-year in March, to $141,300, after reaching bottom in late 2011. Only Phoenix had a higher year-over-year increase at 2.8%. Moreover, Miami ranked among just five cities in the nation to show an increase in annualized housing prices in February, up 0.6?percent from January, and up 0.8 percent year-over-year.
However, and while we are seeing a slow recovery take hold, the real estate market is still far from a full recovery. Prices continue to remain low. And many banks have not yet started to push their shadow inventory into the market. So a full recovery can still be years away.
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