US property news: August 2013 - Experts say housing sector normalising, dousing fears of another bubble

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US property news: August 2013 - Experts say housing sector normalising, dousing fears of another bubble

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[ 2013 Summary
Although it will come as a disappointment to some there is increasing
evidence that price escalation appears to be normalising in the US housing
sector dousing fears of over heating and another bubble.

 Eyes remain firmly fixed on housing new starts, which have been slow to
get close to the targets set. Construction companies cite many reasons
from finance to materials as being a problem while some market watchers
are even whispering 'dirty tricks' in what they see as an effort by
construction companies to drive prices up.

 Ironically Chinese investors have become a critical element in the US
Government's drive for US home price recovery while they try to 'hide'
their wealth from their own government by stashing it abroad. However
these inscrutable individuals have had a change of tack and are now making
major investment into some of the poorest and most down trodden areas in
the US in a gamble that a boost in the economy will grow their

 The great debate is what will fill the void when the investors go as for
sure they will. One argument is that it will be filled by normal folks who
have to date shied away from investing but will do so in a more stable
homes market and stronger economy. Others argue that the American pie
dream of our ancestors doesn't sit easily with the youth of today who
prefer freedom from long term debt and value there mobility.

 The more bullish are claiming that recent hikes in interest rates have
not dented the continuing price rises while others point to evidence that
it is starting to grip and will further suppress the escalation of more
than a year now. It is hoped that investors will have a slow and orderly
retreat rather than a headlong dash for the door which would create a
major quake it what remains a delicate balance.

US home prices set to decelerateWhile home prices year-on-year continue to
show strong growth, particularly in the US largest cities, as reflected in
the latest figures from Standard & Poor's/Case-Shiller index for the 20
city composite. Many now believe that the "over heating" that was the
concern of so many is now abating and that the sector will return to
normality by year-end.

 Month on month the index suggests that home prices rose 2.4% from April
to May and that year-on- year the rise is 12.2% and as such represents
double digit growth for the third consecutive month.

Housing starts sink but future looks brightWith rising mortgage rates and
a lack of inventory threatening the housing sector market watchers are
keen observers of new build activity. They won't be buoyed by the fact
that new starts fell sharply in June by almost 10 per cent from a month
earlier. Of equal concern will be the, almost 8 percent, reduction in
building permits issues which is a key indicator of future activity.
read more [
turns to Chinese Whispers Followers will recall that last month we
discussed figures provided by the National Association of Realtors on
foreign investor activity within the US property market. We learned that
the Chinese had become the second largest foreign buyers of US homes
behind the Canadians that continue to hold top spot. However there are now
new and compelling reasons for the Chinese to increase their interest in
the US property market.    read more
[ will the
market manage the investor bail out?One of the burning questions that
everyone wants an answer to but is afraid to hear the outcome of is, what
happens to the US housing market when the investors move on? It is the
kind of question that sends a collective shiver through all elements of
the sector. We know that investors have been a critical element in the
home price recovery that has continued to gain momentum.      read more

 Rising interest rates slow home price hikesWhile analysts appear to be in
agreement that a return to home price normality has arrived the sector
still confounds the forecasters with the latest expert's report showing
that despite the expected slowdown home prices still grew in June at
almost the same rate as that confirmed by Case-Shiller in May. The
Corelogic House Price index release for June states that; US Home Prices
increased 11.9 percent on a year-over-year basis compared to June 2012.
read more [ me
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