US Housing Market: Following 15 Years Of Boom-And-Bust, Is It Getting Back To Normal?
By Angelo Young | March 5, 2013 5:56 AM EST
The U.S. housing market has been in stabilization mode for only the past year or so following an eight-year run-up to the peak of the housing bubble in 2006 followed by what most homeowners who bought in that period know: a bursting of a massive speculative bubble that sent the nation into recession and millions of homebuyers into foreclosure.
But, according to a recent analysis of more than 380 U.S. housing markets, home prices have in recent months begun to resemble “something recognizable as normal,” said David Stiff, chief economist of Fiserv, Inc., a global provider of financial services technology. “For the past 15 years, home price changes and sales volumes have either been boosted by a bubble mentality or crushed by crash psychology.”
But the worst appears to be over – at least for this latest boom-and-bust cycle – and home prices are expected to grow 0.6 percent between the third quarter of last year to the third quarter 2013, according to an analysis by Fiserv based on the Case-Shiller Indexes and data from the Federal Housing Finance Agency. This growth is expected to pick up afterwards, by 3.7 percent in the following 12-month period and 3.3 percent on average between 2012 and 2017.
By comparison, from 1998 to 2006 home prices grew on average about 5 percent every year. Housing starts are at a historic low as bank-owned inventories remain high, something that also weighs on house prices. In essence, houses are cheaper now than they were in the run-up to the last speculative bubble, so it will take longer before homes reach double-digit appreciations that were a symptom of the last housing market collapse, according to Fiserv.
Global Luxury Real Estate Market At Record Highs
Christie’s International Real Estate recently looked at 10 of the world’s top property markets and found that the price for the world’s priciest homes has risen toward historic highs, fuelled by a scarcity of quality inventory coupled with a high demand from the world’s richest property buyers.
“With financial markets providing a limited return on investment, high-net-worth individuals are recognizing the intrinsic value of investing in non-consumable assets such as prestige real estate and fine art,” says Bonnie Stone Sellers, CEO of Christie’s International Real Estate, the world’s leading luxury real estate network and a subsidiary of Christie’s auction house.
London and New York continue to top the list of the key luxury real estate markets while Hong Kong has the world’s second-largest average price per square foot. Côte d’Azur recorded the highest percentage of international buyers and the highest percentage of second-home buyers. Paris ranked above average on many of the luxury real estate categories, such as number of sales over $1 million.
To contact the editor, e-mail:
Most Popular Slideshows
- Real Life ‘Frozen’: Snow Overwhelms The US, Kills 7; More To Come (Pictures)
- ‘The Walking Dead’ Season 5, Episode 8 Spoilers: Daryl Dixon Is Set To Burn The Place Down in ‘Coda’
- Angelina Jolie, Brad Pitt in Sydney for ‘Unbroken’ Red Carpet Premiere [PHOTOS]
- G20 Summit Awkward Moments: Putin Yawns, Mystery Bubbles Appear, F18 Drama Ensues
Join the Conversation
- Walmart Early Price Matching Special Event On Nov. 21, 2014 Matches Its Competitors' Black Friday 2014 Prices And Includes Exclusive Deals For Samsung LED HDTVs And iPad Air 2 [WATCH VIDEO]
- US Plane Flying Over Russian Skies Spotted; Vladimir Putin Ready For 'Practical Cooperation' With US
- Walmart Pre-Black Friday 2014 Sale On Nov. 21, 2014 Includes Discounts On The 'NBA 2K15' For PS4 And The 'Skylanders Trap Team’ Starter Kit [WATCH VIDEO]
- Alleged 'Microsoft Lumia 1030' Front Panel Leaked With Capacitive Buttons; 'Xbox One' Owners To Get Free Goodies On Anniversary
- Black Friday 2014 Sale: Top Deals On Game Consoles Xbox One, PS4, Nintendo Wii U And More
- Nexus 6 Release Date And Price Under AT&T, T-Mobile And Sprint Listed
- Cold War 2: Russia, China And North Korea’s Blacklisted Company Fortify Alliance -- Reports