Could real estate prices skyrocket again just as they did in 2004-2006? As we continue to hear news of economic recovery fueled by improving employment numbers, it becomes more likely that the price of real estate in most areas could increase dramatically.
After years of declining prices in real estate, many experts are predicting a return to the double-digit appreciation as soon as this year! According to Realtor.com, median list prices have already increased nationwide 5.5% from 2011 to 2012. An overcorrection in real estate prices during the past 5 years will likely contribute to rapid short-term appreciation. According to Lawrence Yun, the Chief Economist of the National Association of Realtors, real estate in hard hit states such as Florida, Nevada, and Arizona, have hit bottom and are likely to rebound as soon as this year. Yun predicts prices will jump as much as 10% by the end of 2012.
The release of foreclosures aren’t likely to have the significant adverse impact on prices predicted by many economists because real estate prices are now at the bottom for most low to average priced properties. Investors are now battling for what remains of income-producing properties. Many agents are even looking forward to foreclosures because they generate multiple-offers and are sold immediately.
The reduction in inventory levels will likely surprise many buyers who have grown used to having a buyer’s market that has provided ample selection and very low prices. If buyers don’t make a decision soon, they may find themselves paying significantly more for second or even third choice homes.