Mortgages Blog

Finance Blogs » Mortgages » Turning point for home prices?

Turning point for home prices?

By Judy Martel · Bankrate.com
Wednesday, May 9, 2012
Posted: 5 pm ET

More than half of the 146 metro markets tracked by the National Association of Realtors saw an increase in median home prices in the first quarter of this year. Prices rose in 74 markets, compared with only 29 in the last quarter of 2011, leading some analysts to predict that home prices are finally hitting bottom.

Markets that saw the biggest jump included a 28 percent increase in Ft. Myers, Fla., and a 19-percent increase in Grand Rapids, Mich. Median prices nationwide dropped 0.4 percent from first-quarter 2011 to $158,100. Biggest decliners included Kingston, N.Y., at 22 percent and Bridgeport, Conn., at 18 percent.

Distressed properties, including foreclosures and homes about to go into foreclosure, accounted for 32 percent of transactions in the first quarter, down from 38 percent during the fourth quarter last year.

Demand for vacation homes

The vacation-home market is also showing signs of a turnaround. Attracted by still-low prices and mortgage rates, buyers are snapping up second properties, although they are staying closer to home, according to the Wall Street Journal. Brokers are reporting that buyers are saying they don't want to miss this window of opportunity since supply is dwindling.

After falling 56 percent between 2006 and 2011, sales of second homes increased 7 percent in 2011, to 502,000.  Meanwhile, the median price dropped 19 percent in 2011, according to the National Association of Realtors. But location still matters: while some parts of the popular Hamptons on Long Island, N.Y., are languishing, other, desirable areas are experiencing bidding wars.

Are you tempted to buy a vacation home before prices and rates rise?

Keep up with your wealth and mortgages and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
BGriffin
June 19, 2012 at 12:36 pm

It is more than a little misleading to compare something with large seasonal variations, like housing numbers, to the previous quarter or month, instead of on a year over year basis.

Do the writers/editors for the website not worry that this bias will damage their credibility?