With only a few days left to go in 2012, we can look in the rear-view mirror and see a year where the real estate market finally bottomed out and the light at the end of the home equity tunnel finally got bigger for home sellers.
U.S. home prices are on the rise, according to the well-known Case-Schiller Home Price index, after a few years of uncertain fluctuation following the freefall from 2006 to 2009. Interestingly, home prices in November 2003 are roughly the same as they were in Fall 2003; I suspect we’ll all look back at 2004-09 as the “bubble years” for decades to come.
The Federal Housing Finance Association published its home price forecast last month as well and predicted growth in prices into the 3-5 percent range for 2013, in contrast to -2 percent to flat in 2012. Of course, -2 percent to flat is pretty good after the freefall years.
Home equity is looking good, consequentially. After years of being abused by the market, home sellers should have some equity to work with after 2012. According to the data folks at Zillow, home equity should recover to the tune of $1.3billion after five years of bleeding (as low as $3 billion in 2008 alone). Home values have been rising steadily throughout 2012, including some areas particularly hard hit by the recession, such as California markets, Miami and Phoenix.
Closer to home, local real estate associations have reported consistent gains in the Central Pa. market through 2012. According to the Greater Harrisburg Association of Realtors, average home prices climbed 2.7 percent in the third quarter 2012 over the same period in 2011, while home sales jumped 11 percent.
In Lancaster County, average home prices climbed 4.5 percent in 2012 through the end of October over against 2011, and home sales were up 16 percent YTD. After a difficult year in York and Adams counties, the association there reports median prices down 2 percent in York County and flat to 2011 in Adams County, respectfully, but home sales climbing at 10 percent and 11 percent with a hopeful outlook there.
Throughout the industry, professionals and observers are started to agree that 2012 was, indeed, the year things began to turn for the better. Let’s look forward to an even better 2013.