House prices rebounded in 2012 as seven out of every 10 metro areas posted significant gains. But price appreciation will be more modest in 2013, according to economists at CoreLogic Case-Shiller.
The CLCS
However, CLCS chief economist David Stiff projects prices will be up just 2.5% in 2013, despite strong spring sales.
“We expect strong buying activity this spring will lead to stabilization of home prices in most lagging markets, resulting in rising home prices in nearly every metro area by the end of 2013,” Stiff said.
His cautious forecast is based on a greater supply of homes for sales, both previously owned and new homes. As prices continue to rebound, more underwater borrowers will be able to list their homes.
The CLCS chief economist also expects markets like Phoenix, which have attracted a lot of investor buyers, could see a slowdown in sales later this year.
“As all-cash purchases and investor demand wane, it is not clear if demand from first-time and trade-up buyers will immediately fill the void, as mortgage lending standards are still very strict and many consumers remain risk-averse,” Stiff said.
“If non-investor demand ramps up too slowly, then recent double-digit price appreciation could decelerate suddenly or even turn negative for a few months.”
