In a media release last week, National Association of Realtors (NAR) reported that the apartment rents are rising at 3% rate while the Owner Equivalent Rent (a measure of rent that the current home owners would pay if they rent out their single family homes) is rising at 2% rate. With the jobs recovery, as the rents rise, some of the renters would move to become owners giving additional stimulus to home sales.
The S&P/Case Shiller Home Price Index increased by 1.3% and 2.0% for the 10-city and 20-city composites in August. The Chicago prices have increased by 0.7% and Atlanta by 1.8%.
The Center for Business and Economic Research of University of Tennessee, Knoxville predicted a positive outlook for the housing market in 2013 at the national level. The report predicts that the Residential investment will be a leader contributing to GDP growth and producing double digit gains both in 2012 and 2013.
Foreclosure activity is at a 5 year low with 62% of the major cities reporting declined activity. This is a positive sign for turnaround in the housing industry. The latest Realtors Confidence Index survey conducted by National Association of Realtors (NAR) reported distressed sales are 24% of Market in September.
You may recall Warren Buffet stating in CNBC Squawk Box interview stating: “.. if I had a way of buying a couple hundred thousand single-family homes and had a way of managing…..I would load up on them….”. Well, it may be that Warren Buffet is a step closer to achieving it. His Berkshire Hathaway is forming a joint venture with Brookfield Asset Management, Inc. to manage a U.S. residential real-estate affiliate network, according to a report released by KCM Blog. Many investors look up to Mr. Buffet, and it is exciting to see that he continues to bet big on Real Estate.
What would be the effect of Hurricane Sandy on the housing market recovery? Forbes has interviewed Mr.Lawrence Yun, Chief economist of the National Association of Realtors to assess the probable damage on the modest recovery. According to Mr.Yun, there is bound to be a negative impact for the next four to six months with declining construction activity, pending home sales and stricter appraisals. Then the market will rebound with insurance money coming in. The article states that the data tied to comparable natural disasters suggest that home prices tend to be inversely affected.