According to a Fiserv (FISV) Case-Shiller forecast the market will experience a rise in home prices at an average of 3.3% annually in the coming five year period ending Sept. 2017.
The past five years have been anything but close to normal for the housing market. 2012 was the start to a slow and modest recovery with the year ending in a positive light.
During the past 15 years the housing market has been unpredictable with home sales and prices being crushed by crash psychology or boosted by a bubble mentality. Since the bubble burst in 2006, home prices fell by 30.5 percent through Sept. 2012’s end. This was a hard hit for the market, and one that hasn’t looked encouraging until this past year, and the forecast for the coming years.
Late in 2011, markets began to stabilize with a rise in home prices of 3.6 percent between Sept. 2011 and Sept. 2012. According to Fiserv out of 384 metro areas tracked, 62 percent reported a rise in home prices during the same period a year earlier with a rise from just 12.5 percent.
Among price gains some of the biggest were experienced by the hardest hit areas during the housing bust. For instance, Sa Jose, California experienced jumped 12.5 percent, Detroit jumped nearly 16 percent, and Phoenix jumped nearly 21 percent.
Other areas were not so fortunate. Long Island, N.Y., for instance experienced a price fall of 8.1 percent. The median income also lagged in comparison to the rest of the US. Valdosta, Georgia and Brunswick, Georgia were also down.
The year is expected to continue with an upswing in the housing market. Home prices are expected to continue to climb in almost all metro areas. Syracuse, New York is expected to climb 5 percent, Billings, Montana 5.5 percent, Santa Fe, and New Mexico 8.1 percent.
There are some big gains forecasted for the year, which is another contributor to the rise in home sales.
Market trends are positive. Prices are still affordable. Interest rates are at an historic low. Home buyers and investors’ are more confident and housing inventory is in higher demand.