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Home Price Increases, Understanding the Implications of The Statistics
Home Price Increases, Understanding the Implications of The Statistics

 
Friday, September 14, 2012
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In the past few months, there has been speculation that home prices will continue to increase, and in Fort Lauderdale, it certainly seems to be the case, given the lack of inventory and sustained demand for condominiums and single family homes. Almost all experts are in agreement that the real estate market is headed towards recovery, using indices including, builder confidence, median home price, and reported sales figures year over year. However, in the coming months, there is a possibility of volatility in the home prices. Chief Economist Lawrence Yun of the National Association of Realtors explained that the inventory or lower priced homes is constrained, which may yield slight inaccuracies in terms of the seasonally adjusted median prices. In a statement released by Yun, he explained, “Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement in the market.”
This is excellent news and in particular, with regard to the luxury market, which is also constrained, which indicates these home prices will continue to increase. However, according to Moody’s Analytics, the upward movement may not be sustainable since banks are poised to release more distressed properties on the market. Analyst Celia Chen of Moody’s remarked, “The distress pipeline casts a shadow over the outlook. Indeed the CoreLogic price index gained strongly between late 2009 and the second quarter of 2010, when foreclosure moratoriums were in place, before losing nearly all of the gains once the distress share of sales picked up again.” In terms of Fort Lauderdale, this could be a relatively short period of fluctuation. Foreign investors are competing for distressed properties and buyers are still seeking out deals in real estate in our area. It is possible that the luxury condo list prices could decline slightly and in the event this occurs, buyers should be ready. For more information properties in Fort Lauderdale, contact me today.
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