With Homes for Sale in Short Supply, Prices Rise

Home prices increased 12.5% this October over last October, according to a report from Case-Shiller, which also reveals that the increase is likely due, not to a reduction in foreclosures, but a tight supply of unsold inventory.

Home price gains are the strongest in eight years, according to the National Association of Realtors, rising in 88% of metro markets, and encouraging real estate investors. Among individual states, home prices rose 25.9% in Nevada, 22.4% in California and 14.2% in Georgia, considered the hottest market because this percentage represents the smallest gap across all states, and is only two percentage points away from the highest year-over-year price increase in thirty-five years. Cities posting growth of 10% or higher include Las Vegas, Los Angeles, Atlanta, Phoenix, Detroit, and Miami, among others.

And there is more good news. The Case-Shiller report lists twelve US cities with double-digit annual returns, along with data proving national home prices have returned to levels not seen since 2004, and only 20% away from those in July of 2006.
For investors, this news couldn’t be better. Those sidelined by a weak market are returning to fuel supply and bring additional balance to demand.

As Prices Rise, the Short Sale Surge Declines

A recent report from RealtyTrac highlights a decline in short sales, which currently represent just 5.3% of all sales, down 11.2% from the previous year. Banks are moving to foreclosure auction sales and bank-owned sales, relieving real estate investors of the short sale method of selling distressed property.

RealtyTrac vice president Daren Blomquist stated, “The combination of rapidly rising home prices — along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO home — means short sales are becoming less favorable for lenders.”

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Brian Davison
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I am the CEO of EquiAlt: real estate based alternative investment firm with activities in equity, debt and private equity. Since 2008, EquiAlt's management has demonstrated a high level of competence in hundreds of distressed asset transactions, recapitalized companies while lending on landmark Las Vegas projects.

We understand that there are several strategies and goals in the area of real estate investing. Based on our experience, we offer education and offerings that are truly investment grade. Available products for investors range from totally passive to the traditional active.

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