originationnews says while home values are expected to rise around four percent this year, the increase is driven more by low inventory than by rising demand. The rise in some markets is due to investors buying especially lower-priced homes, and flipping them in six months to a year as prices improve. Dean Baker of the Center for Economic and Policy Research, noting the vacancy rate rising on single-family homes in Phoenix, where prices have increased 14 percent since 2011, says, “That’s consistent with the story of speculation.” Unlike many others in the housing industry, he will not be surprised if prices fall again. He says house prices typically rise with inflation, currently at two percent, which means it will be ten years before prices return to their peak in 2006, especially given all the underwater mortgages. MHProNews has learned that many of the new jobs that have been created recently are lower paying jobs, which may coincide with the fact that many of the homes being sold are lower priced homes.
(Image credit: andyenstallblog)