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.
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.
It used to be that home-ownership was a part of the American dream. Home-buyers would scour for properties that suit their needs whether it was for their growing family or for a second home. But the global economic slump that has plagued the real estate market has created a major shift on the housing landscape.