Housing Recovery: A Two Phase Process

The Demand Institute Predicts  

I read an interesting article this morning on the housing recovery and how it may be a two-phase process.   The Demand Institute, which is managed by the Conference Board and Nielsen, is predicting the housing recovery to be two-phase.

In the first phase, home prices will increase about 1% in the second  half of this year.  By 2013, sale prices are expected to rise another 1.5%.  Prices are expect to rise yet again in 2014 another 2.5%.

The first phase is said to be caused by investors whom have bought many rentals.  As investors buy up the oversupply of homes to take advantage of low prices and rising rents, the report also predicts this will lead to the absorption of the existing surplus, which will clear by the start of 2015.

Home prices in the second part of the phase are predicted to increase another 3 to 3.5% between 2015 and 2017.  Phase two will begin with higher home prices and a return to home ownership. The prediction is that once prices rise by 3 percent in 2015, homeowners will start to return to the market, increasing the volume of home sales.

Information obtained from DSNews.com.

 

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  1. [...] to the the Standard & Poor’s/Case-Shiller home price index, on a national level, home prices are on the [...]

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