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Slowly but Surely for US Housing Recovery

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US Housing Market  residential real estate  bargain real estate hunters  Daren Blomquist 

Slowly but Surely for US Housing Recovery

By - Monday 29 July 2013

The US housing recovery is taking a slowly but surely approach, which is good news for those with their sights set on property investment. With prices increasing at a steady rate, opportunities abound for bargain real estate hunters and in the buy-to-let sector, maximising yields is within reach.

According to the US Residential Sales Report from Realty Trac, homes now have a median sales price of USD 168,000 (GBP 109,149.6). This is a rise of three per cent since May and a year-on-year rise of five per cent. However, the median price of a distressed home is just USD 120,000 - 34 per cent below the average price of a non-distressed sale (USD 181,500).

Yet sales numbers are increasing and stock limited, meaning these prices won't stay low for much longer. In June, property sales reached an estimated annualised pace of 5.3 million, up two per cent from the previous month and eight per cent year-on-year. Signs indicate lending is increasing too, with all-cash purchases down one percentage point to 30 per cent of all sales. Cash sales were at their highest in metro areas, including Cape Coral-Fort Myers (70 per cent), Miami (64 per cent), Las Vegas (62 per cent) and Sarasota (59 per cent).

In June, institutional investor purchases accounted for nine per cent of all residential sales, up one percentage point from May but down from ten per cent in June 2012. Georgia, Nevada, Arizona, Oklahoma, North Carolina and Florida are the states with the largest percentage of institutional investor purchases at 23 per cent, 16 per cent, 15 per cent, 13 per cent, 12 per cent and 12 per cent respectively.

Bank-owned property sales slowed slightly from ten per cent in May to nine per cent in June. However, the metro areas of Detroit, Modesto, Stockton, Las Vegas and Akron have higher than average bank-owned property sales.

Daren Blomquist, vice president at RealtyTrac, said: "The US housing market is slowly but surely moving toward a more normalised and sustainable pattern after a flurry of institutional and cash buyers flocked to residential real estate last year, pushing up prices and picking clean the best inventory available in many areas. Rising home values should continue to unlock more non-distressed inventory while also pricing institutional investors out of more markets, which, combined with rising interest rates, will cool off the pace of price appreciation."

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