Some investors who are into flipping houses might consider rising prices of homes in several metro areas of the U.S. to be good news, but real estate analysts believe that the second quarter surge in housing prices is only temporary. Most analysts believe that prices will start declining again by July 2010.
The prices of dwellings in most California metros rose during the April-June 2010 period, including foreclosed homes for sale in Ontario, CA. Several cities in the state recorded some of the highest increases in housing prices during the second quarter of the year, but the city of Akron, Ohio remained the top metro in terms of percent increase.
Akron recorded a 36% increase in home prices during the second quarter of 2010 compared with the same period of 2009. The Ohio city was followed by the San Jose and San Francisco regions, with foreclosed homes in California from these two regions recording a 25% rise in prices for the second quarter. At the Riverside area, prices rose by 18% compared with the 2009 second quarter.
Despite these increases, analysts have warned that the market is still not stable enough for investors to take big chances on flipping houses or investing in any significant way in residential properties. According to most experts, the prices were temporarily buoyed by the federal tax credit. Most of them also believe that home sales, which started declining in June, will continue to decline to be followed soon enough by the prices of dwellings.
For those who buy foreclosure houses, the timing might not be right according to market observers. Although mortgage rates are at record lows, most home buyers seemed to agree with analysts as shown by the lack of buyers and the fact that home mortgage applications have remained flat in the past few weeks.
In addition, analysts stated that almost half of the houses sold during the period were sold for less than their original worth, although average prices rose by as much as $2,000 when compared with the second quarter of 2009. This, along with other factors, led analysts to declare that the market is still not strong enough for flipping houses and to give investors some confidence about making significant purchases.
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