If you're hoping for a housing rebound to kick in this year, dial it back. Recent data show that doom and gloom are going to be with the market a little longer.
Pending home sales — a forward-looking measure of home buying — dropped 7.6% in January after a revised 0.8% increase in December, according to data from the National Association of Realtorsreleased last week. Existing-home sales fell 7.2% in January, the group reported last month, while the national median existing-home price was $164,700, unchanged from a year earlier.
What's more, average national home prices for the fourth quarter of 2010 are forecast to fall more than 8% compared with the same period in 2009, according to Moody's data.
But a few small pockets around the country might see strength. Moody's forecasts home prices performing best in five metro areas: Kennewick, Wash., up 3.96% for the fourth quarter of 2010 versus the year-earlier period; Fairbanks, Alaska, up 3.18%; Charleston, S.C., up 3.07%; Corvallis, Ore., up 2.96%; and Anchorage, up 2.72%. These five markets are culled from a Moody's Economy.com model that uses Fiserv/Case-Shiller metro indexes as well as data from the Federal Housing Finance Agency. It looks at data from 384 metropolitan areas in the country. The most influential factors for the forecast include household income growth, population growth, the jobless rate and the user cost of housing.
Granted, these increases are modest. But given that some parts of the country were pummeled by 40% declines in home values, any number that's positive stands out. “It shows those markets have done exceptionally better than others,” says Ross DeVol, director of regional economics at the Milken Institute, an economic think tank in Santa Monica, Calif.
These metros share a few important characteristics. For one, they're all fairly small: None has a population more than 700,000, according to the Census Bureau, whose latest population estimate data is from July 2008.
There was also a substantially less severe decline in employment and in their local economies overall. “Most of these markets did not have a big boom — they did not have a lot of new home construction, so you didn't get a lot of excess supply. You didn't get prices shooting up above national averages for the most part,” DeVol says.
And another key factor: These areas all experienced positive net in-migration during the recession, meaning more people moved in than moved out. “That's very important for the housing market", DeVol says.
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Taken from realestate.msn.com
