Twenty Five Percent of Real Estate Markets to Appreciate

Nearly a quarter of the real estate markets Housing Predictor forecasts in 2008 will see appreciation, while the majority are projected to deflate with slower home sales.

Some 251 markets are forecast in all 50 states for the year with 191 projected to depreciate. Sixty are forecast to appreciate.

Fargo, North Dakota

Those forecast to appreciate are generally less populous or have experienced slower housing cycles than the rest of the country, and most are forecast to appreciate marginally at or around the rate of inflation in light of the mortgage crisis. Texas markets are forecast to appreciate throughout the year, but at a much more modest rate of appreciation.

North Dakota, which has been protected to a large degree from the subprime loan debacle is projected to have another positive year in home appreciation as the state gains more new residents due to tax incentives for new businesses moving into the state. Utah, Tennessee, parts of New Mexico and Idaho markets will also see home price appreciation. Eighteen states have at least one housing market forecast to appreciate.

But the over-whelming majority of the nation is in a concerned state about the real estate market worried over recessionary pressures, and a housing market that boomed in some places for as long as seven years only to go bust. Increasing costs for gasoline and commodities raise the price of groceries and other consumable goods, which represent 70% of the American economy.

Regionally, the west and east coasts were the fastest appreciating markets in the country, particularly California and Florida, but both sunshine states are now troubled by ailing housing markets. However, not everywhere in Florida and California have ailing real estate markets. Some smaller markets in both states may have already hit the bottom of their slumps and may see more sales activity as interest rates lower throughout the remainder of the year, particularly in less urban areas and second home markets.

In 2007 the southern half of the nation saw a huge migration of new residents from colder northern states and Mexico. But fewer people are buying homes these days. It’s gotten harder to get financing and the growth in some areas of the south has ebbed as the nation’s housing markets adjust to a slower pace amid the worst foreclosure epidemic the country has ever seen.

There are also exceptions to the nation’s deflating home markets in Colorado and Wyoming because of natural gas exploration, and Idaho, where the state lays the welcome mat out for big business to make economies grow. There are always exceptions to national real estate trends.

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