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Download Courtesy Market Update PDF
National average prices have stabilized: the decline in investor grade housing prices have been essentially flat for 3 quarters. This average masks some fundamental and seasonal effects. There was shrinkage in the number of markets (21%) that experienced price rises for investor grade properties. But those cities that did increase prices offset the declines in other markets. This is the first time in three years that we see substantial rises in prices at least in some markets even while the majority of markets experienced some decline. Notably California is experiencing a rebound as inventories shrink and prices rise. However, other distressed regions, such as Florida, continue to carry tremendous inventories with prices still in freefall.
- After two quarters of slight increases, US average asking prices are flat.
- Luxury, median, and investor-grade homes are undifferentiated nationally: on average, prices are flat in each category. By contrast, luxury housing was recovering faster earlier in the year.
- Some regions are rebounding: California has had 3 quarters of growth in investor-grade houses.
- Anecdotally, investors are busy with bidding wars in California..
- Nationally, distressed and FSBO inventories are rising and now exceed for sale listings.
- California, however, has experienced declines in both for sale and distressed/FSBO inventory.
- Nearly all markets are “affordable” for investors: net operating income covers mortgage costs, when financing is available to begin with.
- Mortgage rates are the lowest in 45 years, and cap rates are over 10%; but a weak economy, low confidence, and restricted credit are hampering a widespread recovery.
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