In Fannie Mae’s latest housing survey, real estate consumers maintained their expectation for growth in home and rent prices and also expressed more optimism toward the economy.
The January 2013 survey found 41 percent of consumers believe home prices will rise in the next 12 months, down from 43 percent in December, but up from 30 percent a year ago. The percentage of consumers who were pessimistic about home prices and believe they will go down fell to a survey low of 10 percent. On average, consumers believe prices will rise 2.4 percent in the next 12 months, down from 2.6 percent in December, but up from 1.2 percent a year ago.
As prices continue to climb, more consumers also said now is a good time to sell. The percentage rose to 23 percent in January, up from 21 percent in December and 11 percent a year ago. More than two-thirds (69 percent) of respondents believe now is a good time to buy. Not surprisingly, consumers were also more eager to buy rather than rent, with 65 percent of respondents stating they would buy if they were going to move, while 30 percent said they would rent.
When it comes to rent, 50 percent of respondents said they believe home rental prices will rise in the next 12 months, up from 48 percent in December. Consumers expressed the view that rent prices will rise by an average of 3.7 percent in a 12-month period, down from the peak of 4.6 percent in December.
Commercial Real Estate Investors Also Optimistic
Frustrated by continued uncertainty, a sluggish recovery, and a challenging investment environment, investors generally appear eager to put the past behind them and adjust to the new normal. Those findings were outlined in Expectations & Market Realities in Real Estate 2013 – Turn the Page, a new annual report published jointly by Real Estate Research Corp. (RERC), Deloitte, and the National Association of REALTORS® (NAR).
According to the report, investors appear to realize that this environment will likely be with us for the foreseeable future, and that adjustments may need to be made to maximize commercial real estate investment performance and yield in the continuing slow-growth economy.
The three organizations have drawn on their respective capabilities to examine the economy, capital markets, and commercial real estate property markets; to thoroughly assess and analyze existing research; and to offer an outlook for commercial real estate for 2013 and beyond. Findings indicate that the economy is expected to improve only modestly in 2013, with the budget deficit, tax increases, and cuts in government spending expected to continue the economic uncertainty.
In general, capital remains available for commercial property investments, but the discipline for capital has been inching upward and is becoming more selective. The report also carefully analyzes and offers an assessment of the office, industrial, apartment, retail, and hotel property sectors, as well as for commercial real estate as an asset class, for 2013.
This is filed under National Markets.