Lawrence Yun, chief economist for the National Association of Realtors, stated that Las Vegas, Miami, and Phoenix home prices could increase by as much as 50 percent over the next five years. During Yun’s speech, at the National Association of Realtor’s Midyear Legislative Meetings & Trade Expo yesterday, he further added that many cities, which have performed evenly for the past several years, are likely to see home price gains between 20 to 30 percent within five years.
Yun’s assessments are mainly derived from analyzing trends in subprime lending. The markets where significantly more subprime loans were issued are coincidently the same ones that have experienced the biggest downturns.
“While much of the media is focusing on the fact that the rate of foreclosures doubled this year from historic averages, the foreclosure rate has gone from one percent of all homeowner with mortgages to two percent. Foreclosures are being driven principally by subprime loans”, said Yun.
Personally, I think that these are rather bold predictions by Yun… however; his reasoning isn’t too farfetched. I guess time will tell…
Does anyone agree, or disagree, with Yun? I read about this on an NAR press release, click here to read the entire article.
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I agree with Yun. I believe that we are experiencing a dip caused by the subprime crisis, which is resulting in two factors. One is a fear from home purchasing, because home owners are trying to wait for a bottom and the second being a increase in the media attention on the foreclosure crisis which is intensifying the first. After a period of time, we should see the second disappear, but the homeowner fear will take some time. After it does, you will see home prices correct to the upside. Just my thoughts.
I can see it happen in Las Vegas. We still have thousands of people move here every month and tourism is still in full swing. The local economy has taken a slight hit due to gas prices, but people are still vacationing here and construction is going around the clock. People who buy now will be in a great position in three or four years.