Monthly Archives: August 2013

Home Prices Edge Closer to Pre-Crash Levels

The housing market is inching closer to what it once was: Home prices are now within 15.2 percent nationally from their peak, according to a new report by Lender Processing Services. 

The LPS price index rose in June to $229,000, up 6.9 percent from last year's levels. In June 2006, the peak was $270,000. 

However, two states — California and New Jersey — are still playing catch up to their peak levels. California home prices are still down 26.3 percent and New Jersey is down 21.2 percent from its peak, according to LPS’ index. 

Meanwhile, Massachusetts is only 10 percent from its peak housing price levels, and Pennsylvania and Tennessee are about 5 percent from their pre-crash highs, LPS says. 

Texas and Colorado are two states that surpassed their pre-crash peaks. 

Source: “National Home Prices Nearing Pre-Crash Levels,” Mortgage News Daily (Aug. 26, 2013)

Buy-to-Rent Market Predicted to Expand

According to a report by Morgan Stanley, the buy-to-rent market is only a fraction of where it could be, and the market is ready for major growth in the coming years. 

Morgan Stanley analysts predict that the buy-to-rent market will grow from $17 billion today to more than $100 billion in the next several years. They called it a “sustainable business with a long runway for growth.”

According to analysts, institutional investors may be able to anticipate a more than 10 percent return on investments, as rents nationwide continue to rise. 

"Over the past three years, investor activity has removed significant amounts of distressed supply from Southern California, Phoenix and Las Vegas," according to the report. "Consequently, select MSAs in Florida, the Midwest and the Northeast now constitute a greater proportion of the nation’s distressed properties, making them potentially more attractive to institutional buy-to-rent investors."

Source: “Morgan Stanley predicts buy-to-rent boom,” HousingWire (July 31, 2013)

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