Search For Homes and Condos Here





4% Annual Rise in Home Prices Seen

Average U.S. home prices will rise almost 4 percent a year for the next five years, according to a new forecast, and Florida is predicted to lead the way with more cities than any other state that show the strongest signs of housing recovery.

Market watcher Fiserv sees prices stabilizing by summer’s end and then climbing, quickly in some places until gains taper off. The forecast is based on an analysis of leading home price indexes.

Investors will drive much of the momentum, as they are now in cities such as Las Vegas and Phoenix.

First-time and trade-up buyers will eventually follow.

Home prices in Sarasota/Bradenton have fallen by more than 50 percent below their 2006 peak.

Separately, market researcher CoreLogic said Tuesday that U.S. home prices rose 0.6 percent in March from February, the first month-over-month increase since July. Good affordability and declining inventories are key factors.

Conventional mortgage payments now account for just 12 percent of median family incomes vs. a historical norm of 20 percent, says Fiserv economist David Stiff.

The Fiserv forecast, done with Moody’s Analytics, assumes steady economic growth with no major shocks. Markets hardest hit by foreclosures will show the biggest five-year increases in home appreciation, it adds.

Six of the 10 markets where annualized prices are expected to rise most over the next five years had price drops of more than 50 percent from their peaks. Las Vegas, for instance, is 61 percent off its 2006 peak.

Phoenix, Miami and Orlando are the top turnaround cities in its study, based on those markets’ improvements in the first quarter compared with a year earlier. Asking prices are up more than 20 percent in Phoenix and Miami, says Realtor.com. Inventories are down more than 40 percent.

Naples, Fla., and Boise are also climbing in the rankings. New to the list of top 25 markets are Oakland and San Jose, which are benefiting from growth in the tech industry.

The continued performance of local markets will depend a lot on the economy as well as on how quickly lenders dispose of distressed homes, says Realtor.com CEO Steve Berkowitz.

Realtor.com is owned by Move, which operates a network of real estate websites.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., Julie Schmit.




themed image