Good News: A new forecast anticipates US home prices to increase by 4% per year for the next 5 years. The catalysts behind prices increasing are “good affordability and declining inventories,” according to Fiserv’s market analysis.
If predictions are correct, the worst is over and housing prices have finally hit bottom. Those hit hardest by the recession will most likely witness the biggest increase in prices. On average, home prices have fallen by a third since 2006 and continue to drop, however, prices should start “stabilizing” by the end of this summer and then start climbing.
USAToday.com states that “investors will drive much of the momentum,” followed by first time home-buyers and trade-up buyers. Yet, it should be noted that cities like Las Vegas and Phoenix will be among the first major cities to experience drastic price increases.
So how does Rhode Island fare out?
According to a national market forecast by CNNMoney.com, as of May 2012, “median home prices are expected to fall another 0.8% for the 12 months ending December 2012 but rise 4.1% in the 12 months after that.” And Rhode Island is expected to fall another 1.6% but rise 2.8% by second quarter of 2013.
An increasing number of home buyers are adopting the competitive spirit when shopping for the perfect home. Bidding wars are making a return due to the lack of homes for sale on the market.