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Positive Economic Signals from National Housing Price Trends

Dec. 31, 2012
Rising housing prices and decline in the vacancy inventory bode well for the US economy in 2013.

There was good news recently about housing price rise in 20 cities. The national trend is also very encouraging, especially for people who are underwater on their mortgages. Housing prices through September across the US are up a steeper-than-normal 15.0% since the January 2012 seasonal low. In the last dozen years, only 2005 (remember the boom year!) was better at 21.2%. 

Don’t be surprised if you see prices decline over the next few months. A normal September-to-January seasonal weakness in pricing results in a 3.9% price decline. 15.0% higher followed by a 3.9% decline – I’ll take that any day. Increased homeowners equity helps people retire better, and it will provide consumers with a needed cushion when we get to the next significant economic downturn.

Another piece of good news in the housing industry is found in the decline in the vacancy inventory. Some of this decline is not real in that it is no doubt tied to a banking bottleneck where people are living in a home that they stopped paying on months ago These soon-to-be vacant homes will take some of the shine off the overall trend. 

Nevertheless, the inventory has fallen to the lowest level in just over four years. That is a good sign for the industry and it is consistent with our forecast of economic recovery in the U.S. as we head into 2013. 

We have encouraged a lot of people to acquire rental property. The U.S. Rental Vacancy Rate stands at 8.6%, the lowest in 9¾ years and flat with 2Q12. Snap up single-family rental property for positive cash flow and sell it next decade for a healthy capital gain. 

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends. 

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.

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