It was good news for the US property market as the S&P/Case-Shiller Home Price Indices posted a pleasing rise in house prices over the 12 months ending January 2013. It was revealed that average values increased by 7.3 per cent for the ten-city composite and 8.1 per cent for the 20-city composite - figures that will no doubt spark a raft of new real estate investment in the country.
Phoenix emerged as the area with the greatest growth, with a rise of 23.2 per cent. What's more, 19 of the 20 cities posted accelerated year-over-year returns. Detroit was the only city to post a loss, despite posting a positive annual return. However, New York managed to get back into positive figures, after 28 months in negative territory.
David M Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, commented: "The two headline composites posted their highest year-over-year increases since summer 2006. This marks the highest increase since the housing bubble burst. After more than two years of consecutive year-over-year declines, New York reversed trend and posted a
positive return in January. The Southwest (Phoenix and Las Vegas) plus San Francisco posted the highest annual increases; they were also among the hardest hit by the housing bust."
There was also good news for Atlanta and Dallas, which recorded their highest year-over-year gains. According to Mr Blitzer, this is thanks to pleasing economic conditions, with steady employment and low borrowing rates helping to stimulate activity and push down inventories to their lowest post-recession levels.
Nevertheless, research has suggested that market confidence is relatively low in the country. The March 2012 Zillow Home Price Expectations Survey showed economists are showing caution in their predictions about the future of the sector and keeping expectations of a near-term recovery low. Of the 104 experts asked about their predictions for the National Home Price Index over the next five years, the majority stated prices would continue in an upwards trajectory but growth would be slow. In 2013, property values are expected to post an annual rise of 1.39 per cent.
- Thursday 28 March 2013