5 Cities Buck Real Estate Trends While Housing Market Still Struggles

January 6, 2012

in This Week in Real Estate | Tagged , , , , , , , , ,

The Debate Over Fannie and Freddie

Does the answer to falling home prices and rising foreclosures lie in empowering Fannie Mae and Freddie Mac?

Fotolia 6067698 XS1 300x194 5 Cities Buck Real Estate Trends While Housing Market Still StrugglesThat’s what the Federal Reserve thinks. The Fed told Congress this week that part of the remedy for the long ailing housing market could be in allowing the mortgage Goliaths to extend their customer base by providing more cheaper mortgages to a wider population. Cheaper rates mean more people buying homes. Which in turn translates to more sales, less foreclosures and price stabilization.

At a time when lending has been stifled with stricter rules and consumer confidence shot, this does seem like a good suggestion. But its not one that will be embraced and applauded by lawmakers. After all, the two companies don’t have stellar records. Since their rescue by the government in 2008, taxpayers have spent $169 billion to sustain the companies, Reuters said. The Obama Administration, too, supports reducing the government’s role in home financing, the story said. Thus the Fed’s suggestion doesn’t look like it will go very far, experts say.

“It comes at a time that Congress has become quite skeptical of Fannie and Freddie and their role, and seems to be looking for ways to diminish their long-run role in housing finance, not increase it,” David Resler, chief economic adviser at Nomura Securities International, told Reuters.

But a weak housing market is a huge barrier against economic recovery, the Fed said. And it made other recommendations that would allow borrowers to get credit, stem the tide of foreclosures and encourage home sales.

Single Family Homes an Attractive Investment

Tightened credit and a dismal economy may have turned many consumers away from their dream homes. But, the one bright spot in the battered housing market is it’s ripe for investors. With home prices plummeting and mortgage rates for consumers with good credit below 4 percent – a 30-year low – single family homes are an attractive investment these days, says a Wall Street Journal story headlined “Where to put your money in 2012.” The one crucial piece of advice the story suggests is whatever you pour your money into, make sure that you keep your investment at a minimum. “That is especially important in a low-return environment,” the story says.

The Five Shining Stars of the Housing Market

While the rest of the country is seething in the gloom and doom of a battered housing market, five cities are high-fiveing and toasting to bucking the industry trend. The common denominator for the winners is a stable local economy, where unemployment is low and job opportunities ripe. These cities have also been able to check foreclosure activity. Here’s  a look at five real estate success stories as detailed in TheStreet.com.

  • Fort Myers/Cape Coral, Fla: The market here took a heavy beating during the downturn with prices falling more than 60 percent, the story said. But the Fort Myers/Cape Coral area is back with a vengeance. Foreclosure filings are depleting and investors are rising. Median prices skyrocketed more than 20 percent during the first 11 months of 2011, according TheStreet.com. The gain was contributed by investors rushing in to grab the sweet deals.
  • Shreveport/Bossier City: Median price in this Louisiana community climbed 7.1 percent. Low unemployment and job opportunities along with affordable prices have helped the numbers, the story said.
  • Washington D.C.: In the first 11 months of 2011, median prices of homes were up more than 5 percent in the Washington D.C. market and its surrounding Virginia suburbs. The political nerve center of the country benefits from its large pool of government and government-related jobs, Paul Bishop of the National Association of Realtors® told TheStreet.com.
  • Fort Wayne: Median prices of homes in this Indiana town climbed 5 percent. Affordable homes and job growth has helped the numbers, according to Bishop. Fort Wayne has also seen a drop in foreclosures and found a place in Realtor.com’s “Top 10 Turnaround Cities” list for the third quarter.
  • San Antonio: Home prices rose a little over 4 percent in this Texas city. Job growth, population growth and diminished foreclosures contributed to the rise in median home prices.

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