After nine consecutive months of appreciation, August was the first month where home values decreased by 0.1% to $152,100, according to Zillow.
2012 has seen a turnaround in the housing market with sustained appreciation that, at times, has been very strong. As we progress through the latter half of this year, we expect home values to see more volatility characterized by months of home value declines mixed with months of appreciation.
Overall, the positive trend will hold as evidenced by home values being up by 1.7% in August 2012 on a year-over-year basis. Rents continued to rise in August, appreciating by 0.2% from July to August. On an annual basis, rents across the nation are up by 5.9%, indicating that demand, fueled by elevated foreclosure levels, is still outpacing investor-driven increases in rental property supply.
Following up to our previous article titled, “
Consider Minneapolis, Minn. You could’ve bought, out of foreclosure, a three-bedroom, two-bath house of 1,356 square feet on a quarter acre lot for about $29,000. It needed a lot of work, but houses in the neighborhood recently sold for $75,000.
Investors are buying homes at a more rapid pace than ever before, and this time their investments actually make sense. Most are buying homes below replacement cost, or at prices that allow for a reasonable rental return.
The Wall Street Journal and The New York Times both published articles in the past six weeks stating that the housing market has reached a bottom. But hold on for just a minute… It seems that not everyone believes it.
There are many complicated ways to analyze the market conditions in your local area, enough to confuse and boggle the novice investor’s mind. However, you can keep things simple by using our “MAD” method. This means paying attention to three important factors and noting whether they’re going up or down:
One crisp fall Sunday afternoon under bright blue skies, my wife and I visited five homes up for sale. We remembered them by their street names: Big Acre, Blue Silo, Pontiac, Prairie Rose and Lamont. The lineup has a poetic ring to it, but the real music is the potential rates of return from owning them and renting them out.
The Federal Reserve was supposed to protect the value of the U.S. dollar – at least that’s how it was originally sold to the public. We still don’t know why the dollar needed “protection”. It was solid for the longest time, except for the time when President Lincoln printed too many of them to pay for the War between the States, but those dollars came and went.
