After seven years, the housing market is finally recovering and sale prices are finally up again, according to a recent report by analytics firm CoreLogic. In February, sale prices rose by 10.2 percent compared to last year, the highest annual gain since March 2006. CoreLogic also projects that sale prices will steadily rise. The report shows this is a national trend, but the states topping the list are Nevada, Arizona, California, Hawaii, and Idaho.
Interestingly, do these numbers keep away real estate investors? MoneyWatch reported that the number of institutional investors and investment properties are decreasing. When the housing market was low, investors seized the opportunity to buy foreclosures and flip them or rent them out, but with sale prices on the upswing, the properties are no longer lucrative investments.
How do these two factors affect the economy? Will traditional sales make up the loss from investment purchases? Why is the housing market changing?
Paddy Hirsch, Senior Producer of Personal Finance at Marketplace; author of “Man vs. Markets: Economics Explained (Plain and Simple)" (HarperBusiness, 2012)