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Seven cities where home prices are soaring

 

#1. Phoenix
• 23% rise in home prices in 2012
• 49.8% drop in home prices the past six years
• $164,000 median home price
• 6.7% unemployment rate

 

The city's home price gains were the best of the 20

cities in the Case-Shiller index, and distressed sales,

which includes foreclosure and short sales, as a share of the total are lower here than in any other city. Home prices in Phoenix bottomed and its jobless rate peaked at 9.3% in 2009, which was the second-lowest peak rate among these seven cities. Phoenix has the opposite problem of San Francisco; it still suffers from an oversupply of homes for sale. But the outlook for home sales and prices is upbeat.

 

Cnn Money has voted Phoneix

the 7th best city of buy rental

properties in 2012!

 

 

Median home price in 2012: $135,000
Projected home price in 2015: $162,053
Projected annual rent in 2015: $12,268


Phoenix has become an investor's market, with many

of the city's properties being turned into rentals to

house those displaced after the housing bubble

collapsed.rental properties in the area has helped

rents climb by about 7% over the past two years,

according to Rent Jungle.

 

Also on the rise is the local economy. "Phoenix is doing

much better than I thought it would," he said Winzer.

"The economy has recovered nicely, growing 2.2%

over the past 12 months."

 

But for investors, the best time to act may be sooner

rather than later. Housing inventory in Phoenix has

shrunk and home prices are on the rise. During the

first three months of the year, home prices were more

than 5% higher than they were in the year-ago period.

 

 

 

Housing Affordability Index to Set Annual Record

 

by ROBERT on JANUARY 11, 2013 AILY REAL ESTATE NEWS | WEDNESDAY,

 

JANUARY 09, 2013 With 11 months of data reported, 2012 will clearly go down as a record year for favorable housing affordability conditions and a great year for buyers who could get a mortgage, according to the National Association of REALTORS®.

 

NAR’s national Housing Affordability Index stood at 198.2 in November, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power; recordkeeping began in 1970. An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments.

 

For first-time buyers making small downpayments, the affordability levels are relatively lower. For all of 2012, NAR projects the housing affordability index to be a record high 194, up from 186 in 2011, which was the previous record. November’s reading was 2.5 index points below October, but up 1.5 index points from a year earlier. Lawrence Yun, NAR chief economist, said home buyers are able to stay well within their means. “Although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates,” he said. “Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power.

 

A window of opportunity remains open for buyers who can qualify for a mortgage.” NAR projects the housing affordability index to average 160 during 2013, which means on a national basis that a median-income family would have 160 percent of the income needed to purchase a median-priced existing single-family home. Conditions vary widely, with the highest buying power in the Midwest. Even in the West, where the regional index is lower, they typical family is well positioned in most markets.

 

NAR President Gary Thomas said the minor erosion in affordability conditions moving forward could be mitigated by bank and regulatory policies. “Clearer rules from the government regarding future lawsuits and buybacks of Fannie and Freddie loans could encourage banks to use their massive cash holdings to originate more loans, Thomas said.

"A more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10 to 15 percent," he added.

Source: NAR

 

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