Economists Predict 10% increase in home prices in Western States, and Zero Increase in NE States
Capital Economics is predicting western states could experience 10% increase home prices this year, while the NE would likely experience no gain. Read More Here.
I agree on the whole that western states, especially CA, NV, AZ, and ID have the best opportunity for significant price gains due to the sharp decline in distressed property to states that were hurt the most by high foreclosure inventories. But more importantly these western states are also experiencing a big jump in demand, including new construction. Low supply in 2012 and in 2013 with fewer foreclosures, mixed with growing demand is the ideal recipe for upper pressure on home prices. January 2013 home prices for Boise Idaho were up 5% from December, and up 33% from January 2012.
Boise Idaho Prices Up | Sales Down
Historically, home prices dip statistically in Winter. I often attribute the winter dip to the INVESTOR EFFECT, where Investors often keep buying or even increase the frequency of home buying during the winter, buying the lowest priced homes, while conventional home buyers slow down their buying activity in the Idaho winter months, thus we often see a dip in the statistical median home price in Jan, Feb, and Mar compared to the rest of the year. However, in 2013, this trend has broken, investors appear to not like the fact that they don’t have a bunch of foreclosures to consider like they did last year; sales on the whole are down 6% compared to Jan 2012.
P.S. Another important winter phenomenom that can effect the housing marketnegatively is what I like to call the IT’S FREAKING COLD OUTSIDE EFFECT, which Boise saw in abundance this January, getting very unsually cold and nasty weather. This will have an impact on February sales numbers.