Home prices recently returned to 2003 levels

While we look to the future of the real estate market, we must also look to the past. History often repeats itself, but we sometimes forget about this until it is staring us directly in the face. Recent reports about today’s real estate market show that history is, in fact, repeating itself as home prices continue to trend upwards.

The leading measure of U.S.home prices, the S&P/Case-Shiller National Home Price Indices, confirms what’s happening in the marketplace. According to the S&P/Case-Shiller Indices, as of the second quarter of 2012, average home prices across the United States are back at their early 2003 levels. At the end of the second quarter of 2012, the National Index was up 6.9% over the first quarter of 2012 and 1.2% above the second quarter of 2011.   

David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices is quoted as saying, “The news on home prices in this report confirms recent good news about housing. Single-family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing.”

What does all of this mean for residential real estate investors? Are they also going back in time?

We went straight to two leading sources on the subject to help us clear things up.

In September 2012, BiggerPockets.com and MemphisInvest.com published a national survey of residential real estate investors, titled “Real Estate Investment Realities.” This survey indicated that investors purchased 1.23 million homes in 2011 – a 64.5% increase over the 749,000 homes purchased in 2010.The findings also revealed that during the first two quarters of 2012, the investor share of monthly existing home purchases remained in the 26 to 20% range. BiggerPockets.com and MemphisInvest.com concluded that as total sales have risen, 2012 investor purchases should approximate or even exceed purchases in 2011.

Clearly residential real estate investors are in the game. How long before we see reports of investor purchases back to 2003 levels? While we can’t say for sure, we do know that some companies are helping give investors the edge to build up their portfolios in today’s marketplace. MemphisInvest.com recently joined up with Real Estate Worldwide, Inc. to bring their proven investing system to investors across the world. Using their system and tools, we could see investor purchase levels continue to heat up.

Sources:
Home Prices Rose in the Second Quarter of 2012 According to the S&P/Case-Shiller Home Price Indices| S&P Dow Jones Indices ‐ HousingViews . August 28, 2012.

Real Estate Investment Realities National Survey of Residential Real Estate Investors. BiggerPockets.com and MemphisInvest.com. September 2012.

Investment and Vacation Home Sales Surge in 2011. National Association of Realtors. March 29, 2012.