[Overseas Property Forum NEWS] Home prices fall in March and Q1

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Home prices fall in March and Q1
     

"The national index was yielding solid returns as recently as a year ago"  Prices of existing U.S. single-family homes fell in the first quarter from a year earlier for the first time since 1991, the Standard & Poor's/Case Shiller national home price index reported on Tuesday. via Reuters
     

http://www.topix.com/business/real-estate/2007/05/home-prices-fall-in-march-and-q1
     

[JensynMcCoy]

AUSTRALIA'S capital city home prices dropped more than 2 per cent over the March quarter, the biggest quarterly fall in 12 years, a new residential property survey showed yesterday.

The latest RP Data-Rismark Home Value Index showed capital city dwelling values falling by 2.1 per cent over the March quarter of 2011.

The quarterly change was the steepest since the index series began in June 1999, RP Data research director Tim Lawless said.

Prices were flat in March and down 0.6 per cent over the past 12 months, with the Australian city dwelling value median price at A$455,000 (S$608,653), the survey said.

'With household incomes growing at 6 per cent per annum, interest rates potentially approaching the peak of the tightening cycle, rents increasing, and house values going nowhere, buyers are seeing an improvement in their position,' Mr Lawless said in a statement yesterday.

He said that key leading indicators point towards a sedate capital growth environment for the remainder of the year.

'Clearance rates are bouncing around the low 50 per cent mark each week, the number of homes being advertised for sale is almost 30 per cent higher than at the same time last year, and sellers are being forced to adjust down their price expectations.'

[phoenixproperties]

The United States is comprised of fifty states. Each state is governed by federal law as well as state laws. Every state in the US has economic challenges right now, and some have more than others. It is imperative for foreigners to understand that states that have the most issues right now are undergoing massive changes. Many states are losing population and jobs, and increasing income taxes, property taxes, homeowners insurance.

You see, the United States was first developed in the Northeast, Mid-Atlantic, and Midwest. These are areas that had the industrial revolution and they were the most populated areas of the country. Things have changed in the last thirty years. As a result of globalization, manufacturing jobs now only make up 9% of the US job market, compared to 53% in 1965.

These areas of industry are the areas that have older housing stock, high income taxes, and high real estate taxes. Thus, the population is declining as people and businesses move to tax-friendly states in warmer climates for job opportunities and quality of life.

These are areas to simply avoid for long-term real estate investments, as their court systems favor tenants, and properties will not go up in value anytime soon. States like New York, Pennsylvania, Michigan, Ohio, Indiana, and Illinois should be avoided for real estate investment. California is a state that has some of the highest property taxes and income taxes in the country. The state is $28 billion in debt and is projected to be $20 billion in debt for the next five years. Thus, they will be cutting services and raising fees of every kind to fill the gap in their budget.

Texas has a 3% real estate property tax, which destroys cash flow, and many parts of the state are in the hurricane zone, raising insurance rates. Florida is losing population and the cost of living has skyrocketed due to property taxes and homeowner’s insurance. My personal homeowner’s insurance in Tampa, Florida was increased from $1600 a year to $3500 a year.

Tennessee, particularly Memphis, has one major employer. Fed-Ex, with 30,000 employees, is struggling due to the decreased imports from China. This single industry could cripple the real estate values if Fed-Ex starts laying off.

North Carolina has a liberal government, which provides tenants with more rights than landlords. I have been on the losing end, trying to evict tenants in this state. The property taxes and the cost to record documents to transfer property in North Carolina are ridiculous.

Mississippi, Alabama, Arkansas, and Louisiana: forget about it! There is no industry or population trend to drive house values in these states.

And when was the last time you’ve ever heard of Missouri, Kansas, North Dakota, South Dakota, Iowa, Wyoming, Idaho, or New Mexico? There is no gold rush going on in these states, and house values will remain the same or slightly drop in the years ahead.