Tuesday, March 5, 2013

Radar Logic Says National Home Price Gains Are Unsustainable

While some read recent home price gains as a sign of an improving market, Radar Logic warns the recent gains are “unsustainable” and may actually be dampening market recovery.

Radar Logic attributes recent house price gains to anomalous factors it considers temporary, including low interest rates and elevated investor demand. “None of these drivers are likely to last, particularly as housing prices increase,”

Radar Logic anticipates prices will decline again as rising prices begin to repel investors while simultaneously leading to bursts in supply as homeowners and financial institutions feel encouraged to list properties for sale.

Already, home builders have begun to add to supply with a 23.6 percent rise in single-family housing starts year-over-year in January, according to data from the Census Bureau.

See the whole article here.

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